Too Young to Worry About Retirement? Think Again

A recent analysis of the Federal Reserve’s 2013 Survey of Consumer Finances uncovered an unfortunate statistic. The study, performed by the Economic Policy Institute, found that the average American household has only $5,000 in retirement savings.1

Why so little? The answers vary. Some workers may be at companies that don’t offer retirement contributions. Others may not choose to put money into savings on a regular basis. And some may assume they don’t need to worry about retirement until later in life.

That final point could be a dangerous assumption. While other financial obligations might seem more urgent today, you may have no bigger obligation than retirement. Consider that you may be retired for several decades. You’ll need enough money to fund your lifestyle, pay your bills and cover any emergency expenses that arise. To meet those objectives, you’ll likely need to save for a long period of time.

Still not convinced? Below are three reasons why it’s important to start saving today instead of in the future. If you’re not saving, now may be the time to ask yourself why not.


You may have to shoulder a larger share of the retirement burden.

Today’s retirees are generally burdened with funding a larger portion of their own retirement than any previous generation of retirees.

It’s been well-documented that companies are shedding defined benefit plans, commonly referred to as “pensions”. A 2014 study of company pensions from NEPC found that only 28 percent of existing plans remained fully open. A third were closed to new participants, and 39 percent were frozen.2

Depending on your age, your Social Security payments could also be effected. The Social Security Trust Fund is projected to be depleted by 2034, meaning without reform the benefits may have to be cut by 21 percent once the trust fund is depleted.3 To correct the problem, lawmakers will have to consider alternative measures including  bumping up the retirement age.

With pensions and Social Security both facing uncertain futures, that means you will likely need to rely on your own savings and investments to fund much of your lifestyle. Accumulating those savings takes time, which is why starting early is likely in your best interest.


You may not be able to work as long as you want.

Many workers put off retirement savings because they assume they can always save more in the future. However, what if you’re physically unable to work and unable to save for retirement?

It could happen to you. According to projections from the Council for Disability Awareness, one in four 20-year-olds will become disabled before they retire. One in eight workers will be disabled for five years or more. Even the average disability claim lasts more than 31 months.4

What if you couldn’t work for three or even five years? Could you continue to save for retirement? Would you drain your savings to cover your current expenses? If you assume that you can always start saving later, you may be rolling the dice.


You’ll have to pay a significant portion of medical costs.

According to a study from Fidelity, a 65-year-old couple today will have to pay $245,000 for out-of-pocket medical expenses in retirement.5 Think that figure seems high? Consider that Medicare doesn’t cover everything. You could still have premiums, deductibles, copays and more that are your responsibility.

Again, that’s a significant amount of money you will need to have to pay for the kind of care you likely want. Also, it’s possible that number could be higher when you retire. Saving early can help you tackle these costs.

Ready to start saving for your retirement, or to ramp up your current savings strategy? Let’s discuss it. We welcome the opportunity to help you plan an enjoyable and comfortable retirement. Let’s connect soon.








This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit

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Reality Check: It Might Be Time to Revisit Your Retirement Income Plan

Funding your retirement today has changed dramatically from planning a retirement income a few decades ago. Today’s economic circumstances have created a new reality that requires a different approach.
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