The average retirement age, however, has not increased nearly as dramatically, with the majority of workers retiring between the ages of 62-65. So that means a retired person could be looking at financing their lives for another 20-30 years after they stop working.

Another challenge new to the 21st century is that whereas traditionally defined benefit pension plans promised to pay workers a lifetime pension, those have largely disappeared in the private sector. What this means for anyone planning to retire is that you must be responsible for creating your own personal savings and retirement plan.

However, if investing in the stock market is part of your retirement plan, there is another added challenge. There have been four major stock market crashes since 1987, and financial experts foresee more in the future. To add insult to injury we must consider the rising cost of health care in the US and the extreme rise in the cost of health insurance.

As a result of all these challenges, most older American workers haven’t saved enough money to retire full time at age 65 under their pre-retirement standard of living, as measured by the amount of retirement income that’s realistic to expect from their savings and Social Security. This is the sobering conclusion of a recent report by the Stanford Center on Longevity (SCL).

Still, in spite of the gloomy financial outlook for US retirees, this article from Forbes states that it is still, 'a good time to be aging." There’s plenty of scientific and medical research that informs us how to live long, healthy lives. People are eating more healthy, making sure they get plenty of exercise, and just generally taking better care of their bodies. Social research shows what makes us happy and gives us meaning, particularly in our later years. There are many robust, efficient financial products and services, as well as nonprofit organizations like AARP, Area Agencies on Aging, and local nonprofit service groups that advocate for seniors and provide helpful resources. And these resources are at our fingertips because of the internet.

Your new “retirement job” is to face up to the challenges the Rules of Thumb blog from MoneyThumb has discussed in this post and to decide how to make the most of the gift of these extra years of life. There’s a good chance you will live a long time, so it only makes sense to take steps to live long and comfortably.

The post Unique Challenges to Retiring in the US in 21st Century appeared first on MoneyThumb.

If you count yourself among this group of Americans, are you really sure your retirement plan is ready for anything?  You should be proud of the fact that your retirement savings account, work-related retirement plan, and stocks or IRAs--if you have them, and you really should--are steadily growing.

However, we all know how life works. John Lennon said it best, "Life is what happens to you while you are making plans." Barring unseen disaster or other circumstances beyond your control, if you keep on the path of savings you have designed for yourself, retirement is going to be a beautiful, financially secure event in your life.

Steps to Assure Your Retirement Plan is Ready for Anything

Even though you have a solid financial plan in place for retirement, it is important to give your retirement strategy a stress test of sorts while things are still going along at an even keel. To help you do this, the Rules of Thumb blog from MoneyThumb would like to offer our cherished readers a short guide to help you make sure your retirement plan is ready for anything. Here they are:

1. Take stock of where you stand now--Pull together the current balances of any money you have geared toward retirement. Include your 401(k)s, IRAs, other company savings plans, and savings earmarked for retirement that you have. Then calculate the percentage of your gross annual income that you save in a 401(k) or other workplace plans (including any company matching funds) and note the dollar amount that you stash in investments outside your workplace plan.

2. Plug this information into a retirement calculator--A good retirement calculator employees Monte Carlo-type simulations to allow for the variability in investment returns. Among the free online calculators are, T. Rowe Price’s Retirement Income Calculator and Fidelity’s Retirement Quick Check. You will also want to include an estimate of the age you intend to retire, your projected Social Security benefit, and the percentage of your salary you need to maintain an acceptable standard of living in retirement. As for the percentage of pre-retirement income you’ll require, anywhere between 70% to 90% is a credible estimate. You can get your projected Social Security benefit by going to Social Security’s Retirement Estimator.

3. Follow through and periodically reassess--Retirement planning isn’t something you do once and then forget about it.You’ll need to periodically assess your progress and make adjustments to stay on track. When you’re within 10 years of your anticipated retirement date, if you find that you have not accumulated enough resources to allow you to retire on schedule and lead the lifestyle you’d like, then it is time to reassess your retirement plan. You may find the need to work for a few more years, take a part-time job after you retire, or cutting back on the type of lifestyle you lead.

We at MoneyThumb and the Rules of Thumb blog really want our readers to be able to retire with ease when the time comes. By following the above steps, you can get much closer to making this happen.

The post Steps to Assure Your Retirement Plan is Ready for Anything appeared first on MoneyThumb.