Your Savings and Investments Will Be Crucial in Retirement

A comprehensive financial services firm, Worden Capital Management LLC puts its clients first, seeking out wealth management strategies to help them meet their long-term goals. Providing a full suite of services including retirement planning, Worden Capital Management LLC provides tailored guidance to clients who want financial security in retirement.

Traditionally, retirement funding is looked at as a three-legged stool. The first leg represents retirement plans, the second social security, and the third savings and investments. Studies have shown that there is a big disconnect between what workers think will be their major source of income when they retire versus what retirees actually say they primarily depend on.

For example, according to a 2018 report by the Employee Benefit Research Institute, 53 percent of workers expected employer-sponsored retirement plans to be their main income source during retirement. However, only 24 percent of retirees said it was. In another instance, only one third of workers said social security would be their main source of income, but two thirds of retirees stated that it was. Part of the reason for this is that working people tend to underestimate how high their expenses will be in retirement, while overestimating their income.

Other reasons are out of people’s control. For example, employment changes will affect retirement plans. Similarly, changes in the country’s overall demographics (growing number of seniors living for longer on average) are likely to strain the Social Security Administration. For many people, therefore, savings and investments will play a much bigger role in their retirement than they think. This is why it is necessary to take an active approach to safeguarding retirement by placing more attention on that third leg of the stool - savings and investments.