Retirement today is so much different than it used to be. People who were working back in the 50s, 60s and 70s probably had the old-fashioned traditional retirement where they retired with a solid pension plan. This coupled with Social Security took care of many people’s retirement lifestyle, and they did not have to worry about saving much more on their own. Unfortunately, this is not the case anymore.
Very few people working today will have the security of being able to rely on an employer and the government to take care of them in retirement. Many companies have gotten rid of traditional pension plans and shifted to defined contribution plans, such as 401(k)s, where it is the employee’s responsibility to put their own money back for retirement.
Furthermore, employees today cannot rely on the government as much as they used to, as the Social Security system is underfunded and will have to go through some major changes in order to save it for future generations. In addition to this, a host of new forces are altering the traditional approach to retirement planning. We have insanely high and rising healthcare costs, historically low interest rates and a complex tax system that if you do not know what you are doing and how to save properly, you could end up having most of your sources of retirement income subject to taxes.
These are just a few examples of the differences between retirement past and retirement today. To learn more about the many common and understood retirement rules of the past that don’t apply anymore, and how to plan for your retirement properly in today’s world, visit The Prepare Institute website and find an upcoming retirement education course in your area.
Content is for educational and informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation. You should contact your retirement and tax professional before utilizing any of the information in this article.