Are You Planning to Work Longer to Fund your Retirement?

Published on September 11, 2018

Your Plan Might Not Succeed

As we’ve noted in prior posts, Americans in general are not saving nearly enough for retirement. Although people think they’ll work longer to put money in their retirement plans, it turns out that they often miss that mark.

According to a paper put out by Morningstar Investment Management LLC’s head of retirement research, people tend to retire earlier than expected. The paper, titled “The Retirement Mirage: Why Investors Should Focus Less on Timing and More on Saving,” notes that about 48 percent of people retire earlier than expected—an average of about four years earlier. That represents a lot of potential income and funding of retirement plans, whether self-directed IRAs, employer-based plans, or other savings and investment vehicles.

The paper’s author, David Blanchett, suggests that even if you’re thinking of working after age 65, you should consider saving more now in your pre-retirement years. For example, Blanchett found that someone who planned to retire at 69 was likelier to do so at 65.

This retirement age unpredictability can heavily impact one’s readiness to fund a comfortable retirement. The study showed that job changes and health issues can wreak havoc on even the best plans in addition to other factors. Long story short: if you are thinking of retiring past the age of 65, save a lot more as early as you can; chances are you won’t be working as long as you plan.

If you have a self-directed IRA, you are already taking advantage of the more aggressive strategies available by investing in alternative assets (as opposed to waiting to see what the stock market will return). And, as a self-directed investor, you are also likely to be more proactive about your retirement plan.

By including alternative assets in a self-directed IRA, you’ll develop a more diverse retirement portfolio. And you’ll be taking control of your future, today.

Regardless of when you think you’ll retire, it’s always wise to be ahead of your retirement plan. If you’re thinking of self-direction as a retirement strategy, you can read more in our white paper library and open your account with our step-by-step Starter Kits. Have a question? Contact Next Generation at 1.888.857.8058 or NewAccounts@NextGenerationTrust.com