How Will You Pay for Retirement?

 Posted on February 04, 2015 in Estate Planning

Americans make arrangements for their retirement and other estate planning needs in several different ways. A Gallop poll of over 2,000 adults showed that most Americans are planning to rely on Social Security or retirement accounts for their future. However, the poll also revealed other sources of income that people were planning on utilizing for their golden years.

According to the poll, more than half of those surveyed said they plan on Social Security benefits as being their major source of retirement income. One third said those monthly benefits would actually be their primary source, while 51 percent said it would be a contributing source of their total retirement income.

Retirement accounts were noted as another source of income, yet only 48 percent cited these accounts as a primary source of retirement income. Even less—38 percent—cited 401(k) or IRA accounts as a major source of income. The low number of people counting on retirement accounts, financial analysts say, is due in large part to the recession several years ago. Many people in their fifties do not have nearly enough funds in their accounts to fund their retirement.

Fewer than 40 percent of those surveyed plan on pension funds to pay the bills in retirement. Only 20 percent even expect to receive those payments from former employers.

A surprisingly number of people—18 percent—said they plan on using home equity funds to support their retirement. These survey participants plan on either applying for reverse mortgages or selling their home and downsizing when they retire.

Stocks as retirement income only applied to 11 percent of those polled. Savings accounts and annuity funds were each cited by less than 10 percent of participants. Many of those polled indicated that they planned on working part-time after retirement. In fact, 46 percent cited income from a part-time job as a minor way to supplement retirement.

It is never too early to begin estate planning to ensure that you and your family's financial needs are taken care of in your senior years. Contact an experienced Wheaton estate planning attorney to learn more.