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Multiple surveys have shown that many Americans are unprepared for retirement. What should you do if you are getting a late start on retirement savings? Join Johnathan and Melissa on this episode of the Retire Once Show.
2022 Global Benefits Attitudes Survey: https://www.wtwco.com/en-US/Insights/2022/06/2022-global-benefits-attitude-survey
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- Johnathan Rankin CRPC® CEPA®, Founder & CEO
- Melissa Rankin - Wealth Management Advisor
- Theorem Wealth Management, Financial Advisor Dallas Texas
- Retire Once Show - 2022 Retirement Podcast Series
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Disclaimer: Johnathan Rankin is a Registered Representative of Sanctuary Securities Inc. and an Investment Advisor Representative of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Theorem Wealth Management is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.
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Hello, and welcome to the Retire Once Show, the show designed to help you get to retirement, but most importantly, stay retired. I'm your host, Johnathan Rankin. And I'm joined as always by my lovely co-host. Hi, I'm Melissa Rankin. Thank you for joining us. Thank you for being here. We have a great show for you.
Today, we're gonna be talking about how most Americans are unprepared for retirement. E so there have been a number of surveys and studies that have come out recently, and I've seen headlines all over the news and everything talks about these two studies that I've seen that really show how unprepared a lot of Americans are, but I want to dig into them and see, does that really paint the picture of America's retirement?
It may or may not, but there's something that our, our viewers and listeners should know is that Jonathan is all about. He's a big fan of a, a number of people and kind of seeing what that is a, a theory and hypothesis, if you will. He's, he's very big on that. So that's something that everybody should know going into this episode.
She's making me sound like a very fun person and the reason why she married me years ago. So this is, uh, more, it's more attributable to her marrying me for bank, that kind of person. But, uh, before we dig. Make sure you hit that subscribe button. Join us on this retirement journey where hopefully you're not gonna be one of the unprepared people for retirement.
So let's go ahead and dig into the, uh, that first survey. So the first survey is about how most Americans are behind on retirement savings. Yeah, this was, I've seen this article now on Yahoo finance. I've seen it, you know, CBC that it's just reposted that headline most Americans behind on their retirement savings.
So of course, because I'm into surveys and studies, I dug into it and it was a survey by the insured retirement Institute and they surveyed workers between ages 40 and 73. and they sh you know, they talked about how those individuals have insufficient savings to cover retirement needs. Now, the issue I had with the survey is that it only pulled 990 people, less than 1000 folks.
I just, I don't know. How can you say that? Most Americans. And then only talk to 990 people, especially in that age gap, 40 to what was it? 73. That's a huge age gap to get 900 people. Yeah. So you think, okay, so that's what 30. Oh, we go, well, 33 years of, of age difference, 990 people. So you you're talking to 30.
What? 30 people per age group. numbers guy. I just don't think that 30 people really represent the, I agree. It's not a very good representation, but nonetheless, we wanna dig into it because you might see the headline and we want to at least go through some of the results of that survey and talk about some things that, uh, that they found.
So, um, Melissa, why don't you go into one of the first things that they talked about? The retirement savings shortfall one in four workers have no savings at all, which I mean, I feel like I have to say it that way, because one in four, I mean, that's just like an ad that speaks for itself. Yeah. Why don't they just, are you one of those?
One in four dentist recommend that's exactly what I think of one in four financial advisors, don't recommend that you should be, you know, unprepared for retirement. We all think you should be. Yeah, you should be prepared for retirement, but that one in four workers who, uh, you know, have no savings at all.
That is in line with other surveys. So to Melissa's point looked around, there are surveys from PWC, reputable company that, uh, that has surveys that say the same thing about 25% of people have no retirement savings. But for some reason that sounds better. It does that. The shocking part was that they found that 51% of people had fewer than, you know, or under a hundred under $50,000 saved 20% have more than 500,000.
And 8% have over a million. So I'd looked at this as one of the questions that we get often is where do I stack up in the retirement picture? You know, if I've got a million dollars, am I, you know, on the high end, am I on the low end? Am I gonna be okay? Yeah. Even if you've got less than that, where do you really stand?
Well, out of 990 people gives you an idea. If you've got, you know, 500,000 you're in that top 20%, if you've got over a million, you're in the top 8% kind of gives you an idea of people like to know where they stack up versus other people. But I think that brings us to our next point. I mean, the people who are unprepared for retirement, if you will kind of goes to the, the next thing here, unrealistic income expectations.
I mean, I feel like that goes hand in. Yeah, I think that if you have no retirement savings and you're expecting to live off anything, it's gonna be kind of hard to do that. If you have no savings to live off of. I mean, a a, I don't know, a hope and a whim, if you will, is, is nothing that's gonna pay the mortgage.
No, but let's dig. We'll dig into the actual survey results. So 58% of that vast 990 people believe that they're going to need $55,000 in annual income and 35. Believe that they're going to need at least 75,000, but when they talk about unrealistic income expectations, there was a, there was a quote that the study said I kind of, I don't know.
I figured this was a, the way they phrased. It was very judgemental in my mind. So here's a quote. You tell me if it's judgemental or not a remarkably high percentage of workers expect to need annual retirement income in excess of $75,000 in today's dollars. , this is remarkable as shown earlier, they aren't saving and haven't saved nearly enough to meet that expectation.
Maybe it's just me, but I feel like, yes, it's judgemental, but also. Obviously. Yeah, I guess that is common sense. I mean, if they're not saving, how are they, whatever the, the number is, how are they ever going to have enough if they're not saving? Yeah. And I, and I, I understand that part of it, I just kind of found like, Hey, this is remarkable.
You know, just it's remarkable. This is a study , it is remarkable as a study and that this is a headline on news outlets everywhere, but, but multiple places. Even on the retire one show we figured that we'll save you the, you know, the hassle of digging through the numbers. Um, but there was one part of the survey that I did think was useful out of this entire exercise.
And that was that a lot of the responses didn't do enough financial planning. They actually found that only 40% of people attempted to calculate how much they need in retire. Now to me, the shocking part was that only 36% of people between ages 62 and 66. So people who my guess would be closer to retirement or thinking about retirement have calculated that number.
Uh, from, I mean, that's astoundingly low. Yeah. You would think that, you know, for most people that are getting into that near retirement, AJ would at least take the time to calculate, okay, well, how much do I actually need to live off of? But according to this, uh, large, very large survey, uh, only 30, 36% of people have.
So if you are one of. The 64% who haven't, we are happy to help you start that process. Uh, I think planning is something that a lot of people feel like is, is hard to do, or don't know where to start. We'd be happy to have that conversation, but that was part of the, probably the. Most useful part of that entire large survey that had out of the 990 people.
Correct. But there, uh, there was a better survey, a lot more people yes. That I think did have some findings that, you know, he, you know, helped a little bit in, uh, in understanding this retirement issue that we have. Oh, I can see right here, the, the real survey was with 9,600 people, 9,600 people. Is that right?
That is right over, you know, almost 10 times more people than the original one. So clearly they had more boots on the ground, but, uh, you know, could you imagine answering these questions if you're coming out of like, you know, a whole foods or a Kroger or something, and they're just, can we talk about your retirement?
I don't, who answers those survey questions? I don't know if I've ever been asked. You've never been asked. I've never been asked about finances, but then I don't know if I've ever been attempted to be surveyed really. I mean, I usually shop with the kids, so I feel like people are like, eh, she's already got her hands full.
They ask our kids, you know, how well do you feel like your parents are prepared for retirement? our kids, however, are extremely smart. And Harvey would say, well, my daddy works with money. No, they would say what's retirement. uh, but this survey is the global benefits attitude study and it surveyed 9,600 people.
And the first thing is that they found is seven out of 10. People recognize that they're not saving enough. So kind of going back to the point of most Americans are unprepared for retirement. This fits that narrative. You know, if you feel like you're not saving enough, you're probably not. You're probably not saving enough.
Uh, the next part was three in 10. People believe that they're going to work longer than expected. Well, past 70. And actually out of that 30%, a lot of people believe they're not going to be able to retire at all. So ever, ever, never going to retire. Can you imagine thinking you're gonna go through the rest of your life working.
I love what I do. I mean, I get to work with my lovely wife every day, and then we go home every day and then we have our lovely kids that are there every day. And I could do this every day. clearly, I mean, I like, I could never go on that show alone. You know that, uh, by the way, if you haven't seen the show alone, it's fantastic.
I think the season eight is on Netflix. They're air in season nine on the history channel right now. Real fun history channel, as realistic as you're being about your retirement, please be realistic about going on the show. I know for a fact that I can survive on the show alone. I don't think he would make it 24 hours.
I can survive at least, at least a week. I can less, less than 24 hours. I could starve for a week. The second it rained. He'd be out. No, I wouldn't. I can deal with the rain. I know the 10 items I would bring. I, I, I think I've, I could do the show. Could you imagine, see, th there does need to be a show of like, not these outdoorsy people that they show that have all these.
Life skills. They need to take people, all these people who are very unprepared yeah. They need to take people like me. They have no outdoor skills whatsoever. Drop us in the middle of nowhere and see. okay. How fast do they tap up? Do you adapt? No. How fast do you tap out? I, oh, he immediately, I think that he would see it's usually a boat or a plane that leaves and drops the people off.
I think that as soon as they started to go, he'd be like, actually wait, no, wait, no, I would turn into a Bushman out there. I would be so prepared a financial advisor in the middle of the art, you know, of the Arctic surviving and thriving off of all of my non-hunting abilities. And. I could probably fish.
Nope. so you see what our retirement looks like? I could eat berries. Nope. So I think I could do well, you know, you know, my, my lovely wife disagrees with me, but I believe I could do well on the show alone. So that's, you know, every day we get to do this. Yeah. So yeah, I can imagine not retiring, but hopefully, uh, you know, if you're watching this, you're not.
30% of people who believe that they're never going to retire, but going back to the, the survey, we can stop, we can stop dragging on the fact that my wife doesn't think I'd survive 24 hours in the wilderness, cuz I would, uh, maybe an hour, no, not an hour. Uh, there was, you know, a look into the reasons why people weren't saving enough.
And I think that is important to kind of go through of where are people spending their money if they're not saving. So the first thing was 36% are paying off debt. Which it doesn't sound terrible. No's not a bad thing. No, that's not a bad thing. If you're paying off debt and we'll go into a little bit about, if you feel like you're behind, what are some of the things that you can do to try to catch up on your savings?
So we'll go through that in a bit, but paying off debt, never a bad thing. The other one was 27% savings for other reasons. And some of the other reasons they gave holidays. Yeah. Car education. The holidays is the one that got me. I don't understand that Easter or what, what are we looking for here? It's not even vacation it's holidays.
You would have to think. They, they mean. The Christmas Hanukkah holiday season, like the, they that's one holiday. Well, two technically well it's. Yeah, but I mean, a lot of people spend a lot of money during that, you know, that time of year. Okay. First of all, I wanna be part of that family. Cuz what are you getting for Christmas?
That that's instead of retirement. Yeah. EV when I look at, you know, the amount of toys our kids have and I go, we're getting 'em one toy. That's it. They don't need anything. I, I don't think. You know, I don't know. I'm not one of those people that just likes to go above and beyond for holidays because why, and if you're putting off saving for your future or for retirement to spend money on Easter or, you know, Halloween is a big one now with well costumes, I mean, costumes based off which child's costumes, cost that's or candy, what happened to like making your own costume?
Okay, this goes back to your alone theory. You have never made a costume a day in your life. No, I have. You can ask my uncle bill. I used to borrow his football Jersey and his shoulder pads, and I was a football player. That doesn't mean you made it Halloweens in a row. We're gonna need you guys to weigh in on this cost me $0.
It may cost you zero, but that doesn't mean you made it. You weren't out there hands stitching this Jersey, but you can just. Find something around the house, you know, is that what you're gonna tell our kids this year? I, I would love to, if you, I think I should maybe we'll see what they come up with.
Harvey would, he'd be, you know, a police officer, a cowboy because yeah, he's got the boots. Our would be happy to do it loves to wear boots, even with shorts all the time. Yeah. So he is, uh, he might be a cowboy or a police officer, but I have done that before. So if you're spending a lot of money on holidays and you're not saving for retirement, Maybe start rethinking that plan.
Maybe make your own costume. So yeah, exactly. Make your own costume. The next thing, uh, in the survey that I found particularly interesting was the amount of people living paycheck to paycheck right now. So they out of that 9,600 people, 41% of people say they're living paycheck to paycheck. The interesting part was that the number of people earning over a hundred thousand dollars that live paycheck to pay.
Doubled since 2019 and is now at 36%, that's astounding. It is now I know inflation is all over the news and you know, everybody wants to attribute it to that, but you know, making sure that you're setting aside just anything, a little bit of money for long term savings is, is important. I know that it can be hard if you're one of the people living paycheck to paycheck to think like that.
But, um, if you're one of those people living paycheck to paycheck and you're spending a bunch of money on holidays, maybe that maybe there's a middle ground. Maybe there is. So the last point about this survey that I found interesting was, uh, the guaranteed retirement benefit. So 62%, so an over, you know, pretty overwhelming majority of people in this survey said that they would prefer a guaranteed retirement benefit.
Now there are ways to guarantee retirement income through annuities. But they were always looked down on. I mean, even on this show, I was just gonna say, we, we did that episode. We talked about not going all in on annuities. We talked about the high fees of annuities. We talked about that. That doesn't mean that they're bad.
We talked about the cons, I guess if you will, we did talk about the cons because you know, we never, I think they have a bad rap in the fact that, you know, there it's always some 11:00 PM commercial about how you, it always sounds better than. I mean, let's just be realistic here. It always sounds better than it.
It probably is. Yeah. I mean, it's not to say that they're bad, but usually it's oh, here's the next best thing. Yeah, it, it, you're absolutely right. And that's why it, you know, you tie people's money up. That's what they do. It ties it up forever and, or at least for a very long period of time and gives that guaranteed income.
But that doesn't mean it should be avoided completely. It has to make sense for you as the investor. If you're looking for a guaranteed retirement benefit, it is out there. You just have to do the research, make sure that if you're buying that through the means of an annuity, what does that actually mean for your long term retirement picture?
But I also think that a part of it is it's not the fancy thing out there. No, one's, you know, if the stock market goes up 40% or, you know, you pick a stock and it double. You're bragging to your friends. Oh yeah. You know what? I bought this stock and it doubled and I'm a multi thousandaire or whatever, but if you, uh, no, one's going to their friends saying, oh man, I bought this annuity.
I am the investment master. . Yeah. I feel like I've never heard that. I've never heard that now. I've never heard people do the double snap and the guns and say, yeah, I don't know if I've heard the bragging in any sense that he's speaking of, but that doesn't mean that it doesn't happen. Yeah. Well, I do.
I've I definitely have heard people brag about, Hey, I bought this investment. I flipped it. I did this. I made this amount of money. Oh yeah. The flipped it, no, they happens all the time. Everybody flips everything. I mean, you know, everybody it's just houses, investments, anything. I. I flipped a camera. I bought full disclosure, bought a camera for this show here, so you could watch us doing it.
Didn't like it. And so I bought it on eBay and then I sold it on eBay for more than I bought it for. It made me look blurry. Yeah. In case you guys were wondering why. She's being very honest with you. So we bought a, hopefully you could see her not blurry. Now. Hopefully this is a much better experience for those wanting to know we are now using the black magic six K pro.
But, uh, before we were using a camera that made her look blurry and we flipped it on eBay. So people flip everything, you know, but, uh, no one's bragging about buying an annuity. And I think that kind of gives it that bad rap. It is not a bad investment choice if you're looking to guarantee that income stream.
So it can be the right thing for the right person. It is. And you, I would say, do all the research to all the due diligence. I would say, even do more than if you are buying, you know, people do a lot of due diligence when they're buying a house, they walk through it themself, they look at it, they research the old price on it.
They have an inspector come in, do all this stuff, but then they're gonna live in that house for. 10 20, maybe, maybe shorter than that. Maybe a few years you buy an annuity, you gotta look at it as a long term thing, get yourself an inspector on that thing, make sure that you're digging through that and making sure that it fits your needs in your, uh, long term investment objective.
But to say that there's no way to guarantee retirement, you know, it's, it's just not true that it's there just, it's a bit of a fabrication, more of. Headline grabber, if you will. Yeah. Kind of like that first survey. I really didn't like that first survey. It had less than a thousand. Yeah. You can't say most Americans where you're surveying 30.
it's just or 990, well, 30 people per age. Come on, catch up. We went through that. I won't edit that out. What I mean, because this is what she does. You know, this is, this is why, well, if he wants to get technical and be specific, let's keep with that. Look. I just hope that the history channel, if you're watching this, which you probably are.
You know, send me on the alone challenge. I can make it for the a hundred days I could survive. Absolutely no shock got the willpower, but getting back to the topic at hand. Yes. So if you happen to be one of these people who maybe are not prepared for retirement, what can you do? So I think when we go back to the first part of it, you paying off debt, that was one of the big reasons why people aren't saving.
I think looking at the type of debt you're paying off. So if you're paying off high interest credit cards, and I know we've talked about this before, yes. Knock those things. But have a plan for that. But if you're just, let's say your mortgage is at a very low rate and you're just wanting to pay that off, you know, maybe start thinking about building up that savings and, you know, not paying off a very low interest rate mortgage, especially with mortgage rates going up.
You're locked into that for a very long period of time. So analyze the debt that you're paying off and making sure that. It really does make sense to be that aggressive on certain debt if it's at a low rate. And if it just makes you feel better to pay off more of your mortgage, maybe just delegate a small portion to savings.
Yeah. Yeah. Make sure that you are no matter what, throughout both of these surveys prioritize savings. That is something that I think. People do need to, to focus on if they do wanna retire at some point. Now, if you're one of the people that just never wanna retire, okay. You're probably not watching this show.
So let's just go with that. You won't hear this, but if you do wanna retire and you feel like you're behind on savings, start small, start with anything. It doesn't have to be immediately 10% or more or maxing out your 401k. It could be. You know, 50 bucks a month, a hundred dollars a month, or whatever that number is.
It doesn't mean you have to change your whole spending habit. Yeah. Just do something small to get in the habit of doing it. Because when you're in the habit of doing it, let's say you're just saving a hundred dollars a month and you go, okay, well, I got a little bit of a raise. I'm gonna save $110 now.
And then the next month I'm gonna save 120 and you look up and you keep increasing that over years. And five years later, you're saving $500 a. Well, you don't go from zero to 500 if you haven't saved before. If you're just trying to catch up. So start small, try to automate it, whether that's through 401k contributions or just payroll deduction into a savings account, something like that, automate your savings and start small automate.
It is definitely best. And then I think one of the biggest things that we took from the very first well known 990 people survey, and I would say in this larger survey, Start planning early, uh, the earlier or the better. Yeah, I, I look at this as a lot of people may not think, you know, maybe 15, 20 years away from retirement and go, okay, well, I don't know what I need to live off of in 20 years or 15 years, but analyze how far can your savings take you?
I kind of equate this to like gas gauges nowadays. Nowadays they tell you what your cruising range is. So you might want to go on a road trip, but you don't know where you want to go, but at least, you know, you can go 250 miles. If you have a savings account, at least see, okay, what can the savings account generate me in income?
What could retirement be? And if you that retirement, that you project isn't enough to sustain your life. Okay, well, you could save more. You can delay retirement. You just not retire if that's what you want to do. Um, and go on the show alone. Yeah. So those are some of the things that you can do if you are behind on savings.
I am a firm believer. We're not the type of financial advisors that say you have to dramatically change your life today because that's just not realistic. Most people are. If you're behind on saving for retirement. There's a reason. Yeah. There's life happens. You know, things happen. Whether that's health, family, you name it.
Hopefully not holidays. I was gonna say Halloween, so things happen and we recognize that. So that's why start small, but also start planning early. It's just the earlier you can plan the better. If you don't have a financial plan, we can absolutely help with that. There's a link in the show Des. Uh, if you're watching this, or if you're listening to this on Spotify, apple, there's a link there, or you can schedule time.
We'd be happy to start that planning process with you. Uh, but with that, make sure you subscribe to the channel. Join us on this lovely journey. Maybe you might see me on a alone one day. Maybe you, you will not. You might, but with that, I am Jonathan Rankin and I'm Melissa Rankin. Thank you. Thank you.
Registered Representative of Sanctuary Securities Inc. and Investment Advisor Representative of Sanctuary Advisors, LLC.– Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. – Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. – Theorem Wealth Management is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC. This communication has not been reviewed for completeness or accuracy, does not necessarily reflect the views of Sanctuary Securities, Inc. or Sanctuary Advisors, LLC., and is not a recommendation or endorsement of any product, service, or issuer. Third party posts do not reflect the views of Theorem Wealth Management or Sanctuary Securities, Inc. or Sanctuary Advisors, LLC., and have not been reviewed for completeness and accuracy. All further communications from this representative must be sent from and received by email@example.com. For additional information, please refer to one of the following consumer websites: www.FINRA.org, www.SIPC.org.
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