Will you Need to Keep Working into Your Retirement Years?
A recently published study by Ipsos for the ING Group, ING International Survey Savings 2019, has cast some light on why it is so important that people take retirement planning advice early during their working lives.
The study found that 62% in the United States and 61% of people in Europe, are worried by whether they will have sufficient money in retirement.
Furthermore, only 30% of retired people in the US said they were able to maintain the same lifestyle they enjoyed pre-retirement, while only 24% of the non-retired said that they expected they'd be able to enjoy the same lifestyle.
Retirement Planning During Your Second Career
When the Social Security program came into force in 1935 the official retirement age in the USA was 65, yet the average life expectancy was 61*. Nowadays, average life-expectancy is around 76 years** and can be much higher among educated, healthy-living individuals, especially women.
Increased life expectancy creates a need for greater retirement assets in order to ensure sufficient income during retirement and one consequence of this is the advent of later-life careers while another is the increased imperative to plan early and to ensure a diverse portfolio of assets.
Should Investors Try to Time the Market?
It is easy to see why many retirement investors may be tempted by the prospect of timing the market: imagine if you could ensure that you only ever invested in stocks at the time when the market was rising and only ever sold at the time when it was cresting like a wave that is about to crash.
However, your chances of timing your trading to perfection are, in reality, likely to be comparable to predicting the jackpot numbers in the lottery and chancing your retirement savings in such a way is likely to be at best a risky proposition and at worst, a catastrophe.
The reality is that there is no scientific way to time the market. This is not to say that there are no strategies you can utilise in order to protect and grow your wealth, only that these are going to be less about timing and more about foresighted planning, i.e. investing early in order to enjoy long-term gains and having a well-diversified portfolio of retirement assets that is able to withstand the inevitable volatilities of the market.
WEF Report Highlights Retirement Planning Shortfalls
A new report from the World Economic Forum (WEF) titled "Investing in (and for) Our Future", has outlined concerns that many of the world's retirement savers will outlive their savings by more than a decade.*
The WEF warns that overburdened state and private employee retirement plans are ill-equipped to deal with the pressures of ageing populations and new economic concerns, and says that retirees in six of the world's major economies – Japan, the United Kingdom, the United States, Germany, Australia, Canada and the Netherlands – risk outliving their retirement plans by, on average,8 to 20 years.
It also sought to highlight the plight of female retirement savers in particular, who, as well as living longer than their male counterparts, tend to draw on smaller pension pots.