Uncertainty of Social Security and Pension Benefits

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

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MORE IDEAS FROM THE ARTICLE

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.

Estate Planning

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.

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.

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RELATED IDEAS

Group long-term disability policies offered by employers typically replace up to 60% of your income.

To ensure you have enough coverage, aim to bring your total coverage up to 80% o 90% of your take-home pay, including bonuses and commissions.

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IDEAS

Use Power of Compounding ...

To achieve your retirement goals and objectives – you need to have the right amount of corpus to take care of your regular needs post retirement. 

Why you should plan to plan ahead for retirement.
  • Getting stuck in the savings mindset. Saving should be formed as a habit. The amount saved can be increased over time.
  • Medical emergencies. With increasing age comes more health problems. Medical claims might not always suffice.
  • Inflation needs to be taken into account.
  • No state-sponsored pension plan. Not all countries have state pensions or social security benefits.
  • Fragmentation of nuclear families.  With fewer children per family, retirement should be planned without help from your family.

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