Up and Coming Weekly is a weekly publication in Fayetteville, NC and Fort Bragg, NC area offering local news, views, arts, entertainment and community event and business information.
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JUNE 3-9, 2015 UCW 17 WWW.UPANDCOMINGWEEKLY.COM ALAN PORTER, Financial Advisor at Strategic Wealth http://www.iflretirement. com/Alan-Porter COMMENTS? Editor@ upandcomingweekly.com. 910.484.6200 It is a fact that many people are not prepared for retirement. Most people spend more time planning their summer vacation than they do planning for retirement. According to USA Today, almost one-third of workers have less than $1,000 in savings and investments that could be used for retirement, not counting the primary residence or defined benefit plans. Fifty-seven percent of people who do save say they have less than $25,000. Of those work- ers who say they and their spouses have a retire- ment plan, such as a 401(k), pension or individual retirement account, 35 percent say they tucked away at least $100,000 while only 3 percent of those without a plan have that much money saved. The percentage of homeowners 65 and older with mortgage debt increased from 22 percent in 2001 to 30 percent in 2011. Among those ages 75 and older, the rate more than doubled, from 8.4 per- cent to 21.2 percent. The Employees Benefits Research Institute says U.S. families carrying the highest loads of debt are those with heads of household age 55 to 64. They had an average debt level of $107,060. For an age group approaching retirement that is not a good thing. Many people plan to work longer but can't. In fact, 67 percent of workers say they expect to work for pay during retire- ment years, but only 23 percent of retirees say they have worked for pay in retirement. People say "I am not saving so I plan on retiring much later," but often times for reasons they can't control, people are not able to retire as late as they want. Many people think Social Security will not be taxed. It used to be that way, not anymore. If a recipient's income exceeds certain amounts, then another tax will be leveled against their Social Security benefits and up to 85 percent of Social Security benefits can be taxed. If a person is collecting Social Security, they must also collect Medicare Part A when they are eligible. If they don't accept Medicare Part A at that time, they forfeit Social Security benefits. And here's the worst of it, Medicare is now means tested. This means Medicare now uses income to determine what the recipient pays for part B and part D premi- ums, and those increased premiums come right of the recipient's Social Security check. The above deduction from Social Security is imposed because the recipient receives too much income and was too successful. If retirement funds are tied up in the market, wheth- er a person retires wealthy, comfortably and confident- ly depends entirely on the existence of a fair market at the time they retire. No one told you about this one, did they? Think about those people who retired in 2000, 2001, 2008 or 2009. Many who retired during those unfortunate years lost 30 to 70 percent of their retire- ment account value. Again, this may sound depressing, but if a market crash again rocks the economy such consequences may not be avoided. Something else to consider: During the many years a person spends in retirement, retirement income is going to lose huge chunks of value because our government must, and will, be forced to install measures to keep itself afloat. The huge national debt is just part of it. Living too long and running out of money is the number one fear for people in retirement. Retirement is a wonder- ful thing and should be enjoyed, but it is something that needs to be planned for starting immediately. Are You Prepared for Retirement? by ALAN PORTER Often, when people don't save for retirement, they plan to work until they are much older. This doesn't always work out. Best of Fayetteville Awards Party on September 15th. Mark your calendars for the fun and vote for your favorite people, businesses, organizations and venues. Corporate Sponsors: Utley & Knowles CPAs