<ul><li>The aging population is causing fewer contributors.</li><li>More people are retiring due to increased longevity.</li><li>Corporate collapses, such as bankruptcy of Enron negatively affect private pension plans.</li><li>Defined pension plans do also fail from time to time.</li><li>Many employers shift from defined-benefit to defined-contribution plans.</li></ul>

Uncertainty of Social Security and Pension Benefits

Old age typically brings medical problems and increased healthcare expenses.Living out your retirement years in comfort while also covering your medical expenses may turn out to be a burden too large to bear.

Unforeseen Medical Expenses

Without a well-planned retirement nest egg, you may be forced to liquidate your assets in order to cover your expenses during your retirement years.

Estate Planning

Unforeseen illnesses, the financial needs of your dependents, and the uncertainty of Social Security and pension systems are but a few of the factors at play.

The Flexibility to Deal with Changes

<div>
Before we begin discussing how to plan a successful retirement, it's important to understand why people need to take retirement into their own hands in the first place. This may seem like a trivial question, but you might be surprised to learn that the key components of retirement planning run contrary to popular belief about the best way to save for the future. What's more, proper implementation of those key components is essential in guaranteeing a financially secure retirement. This involves looking at each possible source of retirement income.
<h2>Uncertainty of Social Security and Pension Benefits</h2>
First off, it's important to be up front about the prospects of government-sponsored retirement. As we all know, the developed world's populations are continuing to age, with fewer and fewer working-age people remaining to contribute to social security systems.
The Social Security Board of Trustees' <a href="https://www.ssa.gov/OACT/TR/2016/tr2016.pdf">2016 annual report</a>, released in June 2017, projects that Social Security's costs will exceed the program's total income in 2020, largely due to demographic trends: From 1974 to 2008, there were 3.2 to 3.4 workers per beneficiary, a ratio that is expected to fall to 2.2 by 2035. The Social Security payroll tax will rise for some workers due to a 7.3% increase in the maximum taxable earnings cutoff from $118,500 to $127,200, which could help to reduce this deficit, at least slightly. 
A similar pattern exists with other pension systems, including those in many European nations. At the same time, greater and greater burdens are being placed on the system, as more and more people retire and, due to advances in healthcare, are living longer than ever before.
This "double-whammy" effect holds the potential to put significant strains on the system and could leave governments with no other viable option but to reduce social security benefits or suspend them altogether for all but the poorest of the poor.
Private <a href="https://www.investopedia.com/terms/p/pensionplan.asp">pension plans</a> aren't immune to shortcomings, either. Corporate collapses, such as the high-profile bankruptcy of Enron at the turn of the century, can result in your employer-sponsored stock holdings being wiped out in the blink of an eye. (To learn more about how this happens, read <a href="https://www.investopedia.com/updates/enron-scandal-summary/">Business Owners: Avoid Enron-esque Retirement Plans</a>.)
<a href="https://www.investopedia.com/terms/d/definedbenefitpensionplan.asp">Defined-benefit pension plans</a>, which are supposed to guarantee participants a specified monthly pension for the duration of their retirement years, actually do fail every now and again, sometimes requiring increased contributions from plan sponsors, benefit reductions, or both, in order to keep operating. (For more on this topic, check out <a href="https://www.investopedia.com/articles/retirement/06/demiseofdbplan.asp">The Demise of the Defined-Benefit Plan</a>.)
In addition, many employers who used to offer defined-benefit plans are now shifting to <a href="https://www.investopedia.com/terms/d/definedcontributionplan.asp">defined-contribution plans</a> because of the increased liability and expenses that are associated with defined-benefit plans, thus increasing the uncertainty of a financially secure retirement for many.
These uncertainties have transferred the financing of retirement from employers and the government to individuals, leaving them with no choice but to take their retirement planning into their own hands.
<h2>Unforeseen Medical Expenses</h2>
While the Social Security system may survive, planning your retirement to rely on funds you don't control is certainly not the best option. For starters, Social Security benefits will never provide you with a financially adequate retirement. By definition, the program is intended to provide a basic safety net - a bare minimum standard of living for your old age.
Without your own savings to add to the mix, you'll find it difficult, if not impossible, to enjoy much beyond the minimum standard of living Social Security provides. This situation can quickly become alarming if your health takes a turn for the worse.
Old age typically brings medical problems and increased healthcare expenses. Without your own nest egg, living out your retirement years in comfort while also covering your medical expenses may turn out to be a burden too large to bear - especially if your health (or that of your loved ones) starts to deteriorate. To prevent unforeseen illness from wiping out your retirement savings, you may want to consider obtaining insurance, such as medical and <a href="https://www.investopedia.com/terms/l/ltcinsurance.asp">long-term care insurance</a> (LTC), to finance any health care needs that may arise. (To learn more about providing for your medical expenses, read <a href="https://www.investopedia.com/articles/05/031005.asp">Medicaid vs. Long-Term Care Insurance</a>, <a href="https://www.investopedia.com/articles/pf/05/032405.asp">Long-Term Care Insurance: You Have Options</a>, <a href="https://www.investopedia.com/articles/insurance/09/life-expectancy-insurance-annuity.asp">Long-Term Care: More Than Just a Nursing Home</a> and <a href="https://www.investopedia.com/advisor-network/articles/091516/crippling-cost-selfinsuring-longterm-care/">A New Approach to Long-Term Care Insurance</a>.)
<h2>Estate Planning</h2>
Switching to a more positive angle, let's consider your family and loved ones for a moment. Part of your retirement savings may help contribute to your children or grandchildren's lives, be it through financing their education, passing on a portion of your nest egg or simply keeping sentimental assets, such as land or real estate, within the family.
Without a well-planned retirement nest egg, you may be forced to liquidate your assets in order to cover your expenses during your retirement years. This could prevent you from leaving a financial legacy for your loved ones, or worse, cause you to become a financial burden on your family in your old age. (For more insight, read <a href="https://www.investopedia.com/articles/retirement/05/estatecontingencyplan.asp">Your Will: Why You Need a Power of Attorney and Beneficiaries</a>.)
<h2>The Flexibility to Deal with Changes</h2>
As we know, life tends to throw us a curve ball every now and then. Unforeseen illnesses, the financial needs of your dependents, and the uncertainty of Social Security and pension systems are but a few of the factors at play. A secure nest egg will do wonders to help you cope with the challenges of your life's later years. The challenges of your younger years is finding a way to set that up. Read on to learn more. 
 <a href="https://www.investopedia.com/university/retirement/retirement2.asp">Retirement Planning: How Much Will I Need?</a>
</div>

Before we begin discussing how to plan a successful retirement, it's important to understand why people need to take retirement into their own hands in the first place. This may seem like a trivial question, but you might be surprised to learn that the key components of retirement planning run contrary to popular belief about the best way to save for the future.

Retirement Planning: Why Plan For Retirement?

Uncertainty of Social Security and Pension Benefits

Unforeseen Medical Expenses

Estate Planning

The Flexibility to Deal with Changes

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