Krakower believes Americans need to adjust their
attitudes about retirement, and what it takes to have a successful
retirement plan
Robert J.
Krakower interviewed on Fox Business
Jan. 11, 2010 - According to statistics, record
numbers of Americans think retirement is way out of their reach, but at
least one expert thinks people can still make it happen if they approach
their retirement planning in a different way.
In 2009, only 13 percent of American workers say
they are very confident about having enough money for a comfortable
retirement, according to the annual Retirement Confidence Survey by
market researchers Matthew Greenwald & Associates. This is the lowest
number since they started the survey in 1993.
In addition, people apparently expect to work
longer because of the economic downturn, with 28 percent of workers
telling pollsters that theyve changed their planned retirement date
over the past year.
Moreover, 89 percent of those people say that
theyre specifically postponing retirement to increase their financial
security.
Robert J. Krakower, a Certified Financial Planner
and author of Redefining Retirement for a New Generation from On
Task Publishing (www.newretirementrealities.com), believes that the old
rules for retirement are broken, and people need to adjust their views
on retirement planning in order to have a chance at retiring on time.
Forces beyond our control are changing the shape
of retirement itself, he said.
Forces such as increased life expectancy, the
sheer size of the baby boom generation that is just beginning to enter
retirement, and the massive replacement of pensions with 401(K) plans,
shift the risk away from the corporations, where it used to be, and onto
the shoulders of individuals.
The impact of these radical changes on retirement
makes it critical to redefine retirement, to understand all the risks
involved, both old and new, and to think more pragmatically about the
meaning retirement and best methods for generating reliable retirement
income.
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Krakower believes Americans need to adjust their
attitudes about retirement, and what it takes to have a successful
retirement plan.
The generation that is starting to save for
retirement today has a much greater challenge than past generations, he
said.
It wasnt that long ago that the average
retirement lasted no more than 10 years. Life expectancy was much lower,
which lowered the financial burden for most workers. For the boomer
generation, ten years marks the first stage of a retirement that can
easily last 30 years or more.
Longer lives mean increased risk of outliving your
nest egg. Who knew that the thing that would threaten to break our
financial backs in the end would be that were living longer?
Plus, there are just more of us nearing retirement
age than ever before. The demographic bubble is about to burst, and
launching more retirements than at any other time in American history.
These conditions create dramatically higher risk for retirement
planners, he added.
Rise of 401(k), Demise of Old Pension Plan
Present New Risk
The demise of the old pension plan and the rise
of the 401(k) represent a new retirement risk, he said. Now,
individuals must cope with the risk that bad investment decisions can
have catastrophic consequences for their lifestyle in retirement.
So a useful redefinition of retirement will dispel
the myth that investing is always safe and, as long as you stay
invested, no matter what the circumstances, you will come out ahead.
Redefining retirement means taking a fresh look at all the assets to
which individuals have access, and thinking in new ways about how to put
those assets to work to generate lasting retirement income.
About Robert Krakower
Robert Krakower is a Certified Financial Planner
and founding partner of Equity Masters Group and The Action Foundry.
Over the last 20 years, Krakower says has helped his clients make wise
decisions on how to invest their hard earned money. Robert focuses his
practice on providing comprehensive solutions in the areas of
investments, insurance, wealth management, tax strategies, estate
planning and executive benefits.
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