Most people want to be financially independent during their retirement years. Government statistics, however, tell a different story.
According to the Social Security Administration, of people age 65 and older:
Source: Social Security Administration, Office of Policy, Income of the Population 55 or older, 2012; released April 2014
Which group will you be in?
The secret to financial independence at retirement is to commit to a plan today, while you’re working and earning an income, a portion of which can be saved for your future financial security!
Sources of Retirement Income
If you are like many small business owners who are hard at work today growing their businesses, you are also concerned with how to most effectively secure a comfortable retirement for the future. When you retire, your retirement income will depend on three primary sources:
According to the Social Security Administration, the average retired worker in 2015 receives an estimated $1,328 monthly benefit, about 40% of average pre-retirement income. As pre-retirement income increases, however, the percentage replaced by Social Security declines.
You may be eligible to participate in a retirement plan established by your employer and receive pension income at your retirement. You may also be able to contribute to an individual retirement account (IRA) to supplement Social Security and pension benefits.
For many people, there is a gap between the retirement income they can expect from Social Security and employer-sponsored plans/IRAs and their retirement income objectives. Home equity can be used to bolster retirement security. Personal retirement savings, including bank and brokerage accounts and insurance and annuity contracts, can be used to bridge a retirement income gap.