There once was a dream called retirement. After 40-odd years of work, Americans would live nicely off the principle of their savings, see the world and visit their grandchildren without worrying about the price of airfare.
While many are still able to enter this rewarding stage of life, an increasing number of Americans are opting for a dream indefinitely delayed.
According to USA Todays recent Associated Press-LifeGoesStrong.com poll, 73% of American boomers plan to work past retirement age, which is already extended as people live longer.
Fifty-three percent are afraid theyll never be able to afford a comfortable retirement.
I see a lot of nervous people out there, says Seth Peritzman, a senior financial advisor at First Allied Securities and board member of the Denver Jewish Chamber of Commerce.
People need to stretch their assets and become more conservative and frugal, especially in terms of investing. The closer you get to retirement, the more risk-averse you have to be.
The time to be risky is in your younger years, not your older years.
Calculating what one needs to retire is relatively simple but not always that easy to accomplish, he says.
A great deal depends upon your spending habits, Peritzman says. If youre currently spending $5,000 a month, you factor in the mortgage, food, health care costs, etc. However, if you dont cut back after retirement it will take much more than $5,000 to live on, due to inflation alone.
While no one can predict stock market fluctuations, especially now, the one financial constant is that expenses will continue to climb, he says.
Allan Markman, a retired financial planner, says the money you need to sustain you for the rest of your retirement depends on the cost of the lifestyle you want to lead.