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Many Mass Affluent Planning to Delay Retirement

by Kevin Murphy, United Investment Services, LPL Financial Advisor

More than half of mass affluent American workers surveyed (57%) believe they will need to work longer than they had originally anticipated in order to fund their retirements. Only 10% think they will be able to retire earlier than they had planned.1

While these results can be discouraging, it's important to realize that in your personal preparation, you don't have to become another statistic. Try to think about what you can do, prior to retirement, to be able to get by during your later years. Here are some tips to help you reach your retirement goals.


  • Contribute as much as you can afford to your retirement accounts. For 401(k) and 403(b) plans, the maximum annual employee contribution in 2013 is $17,500. Workers aged 50 and older can contribute an additional $5,500. Keep in mind that these are federal maximums and your employer can impose lower limits. If you do not have access to an employer-sponsored plan, or already contribute the maximum, consider funding an IRA or a Roth IRA. The maximum contribution for 2013 is $5,500, plus an additional $1,000 for investors aged 50 and older. Note that contributions to Roth IRAs are subject to income limits.

  • Consider lifestyle choices that could potentially make a big difference. Downsizing from your current residence into a smaller home could allow you to save on your mortgage payments and property taxes. Paying down your credit card debt and any other high-interest loans can also have a big impact.

  • Prepare to work longer, at least part time. The notion that the work "spigot" simply turns off once you turn 65 is a myth. Many senior citizens work well into their 70s and 80s. In fact, the number of seniors who have worked in retirement is 27%.2 A study by the Center for Retirement Research at Boston College found that by working one to six years past age 65 could help 85% of Americans retire with sufficient assets.3

  • Consult with a professional. A financial advisor can help you determine how much you need to invest prior to retirement to live comfortably during your later years. Having a retirement savings goal -- and an expert in your corner -- may help you stay focused on how much you need to accumulate and what you need to do to pursue your goal.


1Source: Bank of America, Merrill Edge Report, April 2012.
2Source: Employee Benefits Research Institute, 2012 Retirement Confidence Survey, March 2012.
3Source: Center for Retirement Research at Boston College, "How Much Longer Do We Need to Work?," June 2012.

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