Start saving now; retiring is harder than it used to be

As I reflect upon the content for this article, I can’t believe the changes that have happened in the not-too-distant past and what is now happening with retirement plans. Some 50 to 60 years ago, retirement at 65 years of age and working for the same company for 25 to 30 years was very common.

With this came a company retirement plan that both the company and employee contributed to that would provide a comfortable retirement supplemented by social security benefits.

My father retired from one major coatings supplier after 25 years of service and at 65 as a traveling salesmen over some eight states and received in appreciation a gold watch at his retirement dinner. That very next day he went to work for a competitive company and worked for another eight years or so. He dove more than 2,000,000 miles in his company cars as well as took many trains and planes in his work travels. He was forced into official retirement at about 79 because of his memory loss.

The number of job changes the current workforce will make in their work career is very difficult to compute; however, it is believed that a job change every 4.1 years is somewhat correct. If one is in the workforce for 43 years, it would appear that some 10 job changes would take place.

With companies being continually bought and sold, participation in retirement plans on their part is becoming a thing of the past. In 2014, only some 53 percent of larger companies offered company retirement plans.

IRA plans seem to be the most popular that these companies offer. Financial planning for retirement is fast becoming the total responsibility of the individual.

Young couples face some $90,000 in college loans just starting out in their work careers and marriage in some cases. They are constantly encouraged by advertising to buy more and to finance as much as possible to enjoy the benefits of life. Saving for retirement takes much discipline in this type of environment.

One can’t start too early today as the required funds to comfortably retire are much greater now as in the past. Most experts believe that a family needs to have saved at least 80 percent of their current yearly income for each year of projected retirement.

If one plans to retire at 65 with average life expectancy at 83 for men and 85 for women, some 20 years would be a reasonable life span during retirement. Thus a couple making $100,000 combined per year x 80 percent = $80,000 x 20 years = $1.6 million of retirement funds ( including return on investments), less Social Security benefits of some $560,000, leaving about $1,040,000 of funds needed for retirement.

Surveys show only 18 percent of the work force is confident they will have enough money to live out their retirement. Another 37 percent are somewhat confident. Two-thirds of workers in the 45 to 54 years of age range have less than $50,000 saved. Only 5 percent of workers contribute regularly to an IRA.

Many retirees think they can live on Social Security benefits, which amount to an average of some $1,200 per month per person. Since the Social Security monies have been heavily borrowed against by the Federal Government for the tax year of 2014, for each federal tax dollar collected, 24 cents went to pay Social Security, and another 24 cents went to pay for Medicare, Medicaid, CHIP and marketplace subsidies. With the aging population skyrocketing, Social Security benefits will be under continued pressure for revision.

The U.S. is not a saving nation, and we are among the lowest of the major world countries. As far as written plans for retirement, only some 40 percent have even attempted it.

I would encourage you to visit “Taking the mystery out of retirement planning” designed by the U.S. Department of Labor and its partners. The website is

This document is very complete and comes with detailed instructions and questions for you. This is not a fast form to complete with quick answers and will take time and thought. If carefully done, it will give you peace of mind for a comfortable retirement. I also recommend you locate a financial adviser that you can trust for suggestions in helping you obtain your goal.

Even if you find you have not saved enough monies, you certainly have the option to continue working past 65. Some 26.9 percent of those over 65 are still working in some type of employment.

Dean McFarland is a board member of the Central Indiana Council on Aging.