Planning for retirement has always been a traditional part of the saving process for most working people. As recent as the 1980’s, many companies have offered retirement savings called pensions as a benefit for workers.  A pension plan is a guaranteed monthly sum granted at retirement and requires no employee contribution.  In the last 20 years these pensions have been replaced in many companies by the now well known 401K plan.  The 401K plan is a tax deferred retirement savings plan where contributions are made by employees and the company.  The contributions are invested into stocks bonds or money market accounts.  Individuals can change these investments as they see fit.  The payoff at retirement time with a 401K plan is dependent on how much money was made off of the investments.  

Many of those approaching what they thought was their retirement age now see that golden age of retirement racing  further into the future.  The losses that many have sustained to their retirement investments leave people wondering how to restore their retirement nest egg.

 There are ways to plan for retirement and safeguard investments; it is just more difficult than it has been in years past. Postponing retirement and delaying social security benefits is one option to increasing retirement income.  According to this years report the average social security benefit is $1,150 per month.  This is a modest amount for many who have established a certain standard of living.  The remainder of the retiree’s monthly income is supplemented by retirement savings.  It is estimated that monthly benefits increase by about 8% for each year of work.  Delaying retirement would increase benefits and allow for more contributions in to the retirement plan.  Regularly researching and frequently adjusting investments depending on the changes in the market is crucial to holding on to the earnings in any retirement plan. 

The risks associated with deciding how to save for retirement have increased because the playing field has changed dramatically in terms of retirement savings.  Investing in a time of financial instability is always a risk, especially for those close to retirement age.  Those in their 20’s or 30’s have years of a fluctuating market to gain back any lost investments.  Younger people who are years from retirement can invest with a higher level of risk but for those who are nearing retirement age the main goal is to secure investments and maximize the income for the retirement years. 

Retirement planning has become a series of difficult choices.  Deciding how you want to live after retirement can be a determining factor to deciding on what age to retire.  Many dream of the many things they will do after retirement from travelling to purchasing that summer home on the beach. The reality is that because of increased risks associated with the investments in retirement savings and the financial instability of the economy many will be forced to change their plans. 

Researching and learning how to be your own investment planner rather than relying on others is a major factor in avoiding continued loss to retirement savings.

Retirement Planning After Recession Becomes a Series of Difficult Choices was created by and is property of American Consumer News.