In the new book, Falling Short: The Coming Retirement Crisis and What to Do About It, Charles Ellis says that while just 30 years ago, most American workers were able to stop working in their early 60’s and enjoy a long and comfortable retirement, that brief golden age is over!
As responsibility for retirement savings shifts from employer to employee, increasing life expectancy and health care costs are key challenges that retirees today will face. On top of that, Social Security is replacing less of pre-retirement income, traditional pension plans are being exchanged for 401k plans with modest balances and employers are not providing health benefits for their retirees.
Mr. Ellis suggests a couple of changes that need to take place. For one, waiting to retire from age 62 until age 70 provides a 76% increase. He ventures that many of his colleagues in the investing world do not know that. He also points out that if your full retirement age is 66, that collecting benefits at the earliest age of 62 results in a 25% reduction in benefits.
Read much more detail about his research at http://tinyurl.com/qbet8dh.
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