Even Big Retirement Savers Are at Risk


Retirement


April 11, 2024

As fantastic as it is to have saved a lot for retirement, just because you’ve got a high balance doesn’t mean you’re set. A recent study quizzed people between the ages of 50 and 75 on their understanding of essential retirement planning topics, such as longevity risk, Medicare, investing concepts, annuities etc. participants who have at least $1.5 million saved for retirement managed to answer just half the questions correctly.

 

Getting 50% of the questions wrong is bad enough, but I was even more concerned to see that the overall percentage for all participants—regardless of the size of their retirement savings—was a success rate of 31%. Men (34% correct answers) did slightly better than women (29%).

 

As concerned as I am, I am not really surprised. Our retirement system is ridiculously complex. Deciding between Original Medicare and Medicare Advantage, figuring out when to claim Social Security, managing required minimum distributions on IRA and 401(k) accounts, setting a withdrawal strategy of those accounts so your money lasts longer than you, are just some of the insanely hard decisions that need to be made, and managed throughout retirement.

 

I am thrilled if you have done a great job of saving a lot for retirement. But that’s not all that you need to do. Making smart financial choices before and during retirement is going to be the key to maintaining your security.

 

While I can’t make the system easier to navigate, I sure can help you become a more confident decision maker.

 

I really hope that if you aren’t yet a regular listener of my weekly Women & Money podcast, you will subscribe now and commit to listening. We don’t cover retirement topics every episode, but we sure cover them often. And I love to answer questions listeners have. It’s entirely free, so what are you waiting for?

 

I also hope you will find the time to read my book, The Ultimate Retirement Guide for 50+, which I recently updated. I would even be thrilled if you borrow a copy from the library, if that’s what works for you.

 

Anyone who has read this book already knows that in addition to a lot of detailed advice, I have two clear retirement planning messages. First and foremost: you must, must, must learn enough to be able to make informed decisions. This is your retirement and your money. Financial literacy is a need, not a want.

 

At the same time, as I explain in detail in The Ultimate Retirement Guide, it can also be smart to hire a financial pro to help you work through a lot of these consequential decisions. Not to make the decisions for you, but to help you carefully lay out and understand all the moving pieces of retirement finances, and then offer analysis that will help you make the smart decisions for a comfortable and secure retirement.

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