Are you prepared for retirement?

The latest measurement of the National Retirement Risk Index (NRRI) shows that “half of today’s households will not have enough retirement income to maintain their pre-retirement standard of living, even if they work to age 65 and annuitize all their financial assets, including the receipts from a reverse mortgage on their homes.” Are you prepared for retirement?

SOURCE: Federal Reserve Board, Survey of Consumer Finances

The NRRI is an assessment of Americans’ retirement preparedness undertaken by the Center for Retirement Research at Boston College each time the Federal Reserve updates its Survey of Consumer Finances. (SCF). The Center augments the Fed’s date with other factors to calculate the percentage of Americans “at risk” of being unable to maintain their pre-retirement standard of living at the point when they do stop working. Among the lenses through which the researchers looked were:

• Pension coverage
• Age group
• Income group

Since the Fed’s Survey of Consumer Finances was last conducted in 2013, the NRRI has declined somewhat, from 52 percent to 50 percent in 2016. That continues a modest downward trajectory since the SCF’s peak 53 percent reading in 2010. The NRRI dates back to 2004.

Economic conditions from 2013 to 2016 generally improved for most Americans, particularly through household wealth. That would lead to a reduction in the risk index. But those positive factors were offset by an ongoing rise in Social Security’s full-retirement age, declining interest rates and new rules affecting the amount of home equity that could be accessed through a reverse mortgage.

To look at the Center for Retirement Research’s overview of its latest NRRI study, you can click here. But here’s the Center’s bottom-line assessment: Simply that “retirement readiness remains a major challenge for many of today’s workers; they need to save more and/or work longer to improve their prospects for a secure retirement.”

Save More to Work Less

We are proponents of the former — saving — so that you can do less of the latter — working — and spend your golden years enjoying the life you’ve earned. Many individuals already are benefitting from the tax advantages of investing through a traditional or Roth IRA or other retirement plan; using a self-directed account will provide an even wider range of assets in which to invest.

Having — and growing — a retirement account is a smart strategy for anyone. And you can “turbo-charge” the financial advantages when you roll over your investment funds into a self-directed account. Helping investors navigate that often-confusing process is our specialty at Investment Resource of AZ, LLC. Of course, you should do your own due diligence in determining whether a rollover makes sense for you. Once you have decided that it does and you are ready to tackle the process — or if you simply want more information — we can help. Our team has successfully rolled over millions of dollars in IRA funds for clients, educating them, streamlining the process and supervising each step of the way for them. Call us at 602-885-6122 or email evelyn@azirarealestate.com.