Have a retirement plan

Carlotta Daniels-Randolph | 3/31/2014, 4:05 p.m.

Census data shows that the retirement age population has grown steadily over the last two decades and continues to trend upward. People are living longer and are relatively healthy and vital enough to work beyond the age of 66, the current official full retirement age established by the Social Security Administration.

Most of us are aware of the television ads that in dramatic fashion ask workers to consider how far their retirement income will take them if they continue to fund them at current levels. These ads feature a diverse group of individuals attempting to stretch a projected retirement income valued banner out as far as possible to reach advanced age markers. Of course these tethered income banners don’t reach as far as one might hope and emphasizes the point that one might be wise to make other plans. This is not a new issue. Bankers and investment houses have been making this point forever.

This dilemma presents several challenges to individuals whose current plan falls short of their projected needs. You have to make the choice to fund your retirement plan at a higher rate, invest more aggressively, or work longer than you initially planned. For some, it may be necessary to do all or some combination of the three choices. All of these strategies come with challenges that should give us pause for careful reflection and consideration. Being more aggressive with your investments is ok if you are not close to retirement age and can make up any losses overtime. It pays to get trusted advice and guidance when contemplating this approach. Making the decision to work longer may be preferred by some, but others may have quality of life concerns that require more freedom by a certain age. Let’s face it-- most people want to work to live, not live to work. Unless our work is truly our passion and not considered laborious drudgery, then working as long as we can might be preferred.

Funding your retirement plan at a higher rate is a practical approach, but it means taking dollars from another area and it could prove to be a hardship for some. There may be opportunities to realize savings in other areas that we may not have considered. Energy efficiency is one that should be investigated. The average household wastes hundreds of dollars a year in energy costs due to simple things like poorly sealed windows and doors; not using the energy efficient light bulbs; and leaving electronics plugged in when not in use.

These savings could be put to better use in variety of ways, not the least of which is savings for retirement. Monitoring all of our expenses for waste and frivolous spending is advised.

Another means to fund your retirement is to use a hobby or pastime to create income. What better way to earn money than to do something you would do for free? It could be making and selling crafts or collectibles online, cooking and baking for others, freelance writing or photography or a variety of other enjoyable means of earning additional income.

Whatever approach we choose to ensure we have enough to fund our retirement should not be a source of stress and panic, but rather a thoughtful balanced approached.

Carlotta Daniels-Randolph, M.Ed. is a workforce development professional with 20 years’ experience in the public and private sector and an administrator and adjunct instructor at Delaware County Community College.