With all the immediate economic fallout associated with the COVID-19 pandemic, there’s still more trouble ahead for individuals focused on retirement planning and saving.
Unlike any other moment in recent memory, retirement planning faces intensifying risks. Soon-to-be retirees must heed the warning calls and push for a collective response among government, employers, and other stakeholders to assist with the growing crisis and take action.
And it’s just not in the United States. Retirement programs around the world feel the strain, too, as economies sputter, communities mature, and employment opportunities dwindle.
According to the Transamerica Center for Retirement Studies, Americans will need 67 percent of their income during retirement. Yet, only about a quarter of them are on course to meet that savings threshold.
The study states that employers, now more than ever, can help close the monetary gap and reduce retirement-related risks with the adoption of a new age-friendly, social contract.
Only 37 percent of employees in the United States believe their employer practices an age-neutral workplace philosophy, while just 30 percent feel their employer embraces a culture that includes all ages. By valuing all workers, employers will dramatically improve worker standing and pave a sustainable path forward.
What does this look like? The Center says extended benefits are a start. Retirement, health, and welfare benefits will diminish the economic disparity so many face today. Portability must also be part of the equation, allowing workers to keep their benefits even as their situations change.
Financial courses, education, flexible work arrangements, and health programs can also lift workers. Only about 28 percent of employers offer such perks, the Center found.
Paychecks cannot be the only reward for an employee’s hard work. Compensation should also include a blend of benefits that support retirement planning. The Center says employers can have a big say in retirement planning if they take the mantle and lead.
Employees also have tools they can use to offset projected deficits in their financial planning, including a Home Equity Conversion Mortgage.
Retirees who are at least 62 can explore the possibilities and benefits of this mortgage program. It’ll allow them to substantially increase their buying power, retain their liquidity, and open the door to new financial opportunities when it’s needed most. Borrowers will no longer make monthly payments if they live within the home and are entitled to sell the house or pass remaining equity on to their heirs.
Please contact us today to learn more about how you can boost your income and enjoy the freedoms of retirement life.
*(1) at the conclusion of a reverse mortgage, the borrower must repay the loan and may have to sell the home or repay the loan from other proceeds; (2) charges will be assessed with the loan, including an origination fee, closing costs, mortgage insurance premiums and servicing fees; (3) the loan balance grows over time and interest is charged on the outstanding balance; (4) the borrower remains responsible for property taxes, hazard insurance, and home maintenance, and failure to pay these amounts may result in the loss of the home; and (5) interest on a reverse mortgage is not tax-deductible until the borrower makes partial or full re-payment. This material is not from HUD or FHA and has not been approved by HUD or any government agency.