Daniel Orfin’s Advice for Albany Residents Planning Retirement

Today, life expectancies are increasing beyond many people's capability to save for retirement. Many Albany residents, especially women, find that they have not saved enough to match their life expectancy. Financial advisors like Daniel Orfin are able to offer their expertise to people who are saving for retirement, offering advice on how they should adjust their attitude toward saving money in order to enjoy a more productive and financially secure existence.

Should you save as if you’ll live forever? This is a question that many future retirees wish they could ask their financial advisors, and the answer is fundamental to an effective retirement plan. The shift in expectations experienced by many Albany residents means that they should think carefully about their retirement prospects and about how they will want to use their money as they age. These are the most important reasons why American workers should take a close look at their prospects for retirement income.

Rising Life Expectancies

At the beginning of the 20th century, life expectancies were only around 47 years of age. This staggeringly low figure is owed in part to the dangerous prospects of childbirth and infant and child mortality. By the end of the 20th century, life expectancy had increased to nearly 80 years of age. This drove a huge shift in how people planned for their retirement years.

Changes in life expectancies were driven by major improvements in the medical sciences. Treatment of heart conditions, cancer, and other serious medical issues all received a great deal of research funding and innovation. Many conditions that were considered death sentences in the early 20th century are now considered survivable events, and the patients affected may expect to resume a healthy lifestyle after their treatment is complete.

The shift away from smoking tobacco has also increased life expectancies. As fewer people in the younger generations smoke, lung cancer rates have dropped. It is worth noting, however, that the increased dependence of young people on vaping may cause a serious generational health problem in the decades to come.

Obstetrical science and newborn medicine have also made huge strides. Childbirth is now an overwhelmingly safe activity, compared to the danger it presented in the previous centuries. Many babies who could not have been saved even ten years ago are growing up with few limitations.

Changes in Retirement Planning

In the past, retirees could be more certain that they would have enough money when it came time to use it. Many people had fully paid pension plans through their places of business, leading to long-term security with guaranteed income. Pensions have gone by the wayside or have been replaced by 401(k) programs which require the employee to make a significant financial contribution toward their own retirement savings.

401(k)s are also subject to the mercurial stock market, meaning that a bad year around the time of retirement can be a dangerous prospect. Aging investors need to account for these market changes by shifting their money into less risky financial vehicles as they age.

Many people may also have the mistaken impression that they will be able to live on Social Security when it comes time to retire. Social Security represents a poverty-level income for seniors who rely on it exclusively.

Active Retirement

In the past, retirees expected to plan for a 50 percent reduction in their income when deciding how much to save. Recent developments have shown that retirees should plan for at least 80 to 90 percent of their annual income in retirement, or 100 percent if they are considering a great deal of travel. This figure may stun younger workers who have not yet begun to take retirement planning seriously, such as young parents in their 30s.

Many of today’s retirees are healthy and active. They engage in many of the same activities that they enjoyed when they were working. They may be supporting their children or grandchildren who still need help. Their attitude toward retirement savings may surprise younger generations.

According to Paul Sullivan in the New York Times, elders’ attitudes toward their lives changes how they save and spend their money. If they feel young, they are more likely to make short-term decisions about their money. If they are feeling the rigors of age, they are more likely to become conservative with their money. All elders and retirees are beginning to understand the limitations of today’s retirement system.

Saving for a Long Life

Future retirees need to understand that their money will need to last longer than they had planned. They may also want to keep up with their activities like travel and hobbies. Younger investors need to make changes now in order to keep their futures secure. Investment advisors like Daniel Orfin can help the people of Albany learn to manage their money for security in the present as well as in the decades to come.