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Photo: Jay Yozviak/Photography by JAY, License: N/A, Created: 2016:07:14 23:03:52

By Peter D. Shelp

Throw out those rocking chairs — retirement is changing. The goal of enjoying a comfortable retirement lifestyle is still the same. But the types of activities people plan to enjoy in retirement and the opportunities they plan to pursue are changing and expanding.

The New 65

Advances in medicine have played a major role in the changes, especially in terms of increased life expectancies. The average life expectancy for a baby born in the U.S. at the turn of the previous century was 47.3 years. Fifty years later, the life expectancy for newborns was 68.2 years. According to projections, babies born in 2012 can look forward to an average life expectancy of 78.8 years. That’s an increase of over 66 percent in a little more than 100 years.

We’re Living Longer Average Number of Years of Life Remaining, 1989–2012 1989–91 1999–2001 2012

30-year-old female 50.2 50.6 52.1

30-year-old male 44.1 45.9 48.0

45-year-old female 36.0 36.3 37.9

45-year-old male 30.7 32.1 34.1

60-year-old female 22.9 23.1 24.6

60-year-old male 18.5 19.7 21.7

Source: The 2012 Statistical Abstract, U.S. Census Bureau, and Centers for Disease Control and Prevention, National Vital Statistics Reports, Vol. 65, No. 8, November 2016

The Old Three-legged Stool

More time to enjoy being retired is a big plus. However, a longer retirement means you’ll need more money. Where will your income come from when you retire? Traditionally, financial professionals used the “three-legged stool” analogy to explain the most likely sources of a person’s income in retirement. The legs were Social Security, pension benefits and personal savings: three income sources working together to support your retirement.

Let’s look at how well the three legs are holding up these days.

Social Security: The Social Security system was designed to provide supplemental income only — not the bulk of a retiree’s living expenses. At the beginning of 2017, the average monthly Social Security benefit amount was $1,360 ($16,320 per year), which is not enough to allow most people to live comfortably. As the chart shows, today’s retirees receive only 33 percent of their income from Social Security. Plus, the future of the program is uncertain; benefit formulas and age requirements could change.

Pensions: This is the leg that has changed the most. Traditionally, a pension is a steady monthly benefit paid to covered retirees who accrued vested benefits while employed. Pensions are much less common today. More and more employers are offering retirement savings plans instead. Retirement benefits under these plans are determined by the amount you have in your account.

Savings and Investments: Like many people, you will probably have to rely on your personal savings and investments, in addition to the balance in your employer’s retirement savings plan, to supply a significant portion of your retirement income, especially if you won’t receive traditional pension benefits.

A Working Retirement

Not everyone is ready to stop working at “normal retirement age.” Some people plan to continue working so they can stay active, pursue new interests, continue to earn a full-time income or simply make some extra money. However, if you have to work just to make ends meet once you reach retirement age, it could be a problem. There are many factors, such as your health and appropriate job opportunities, that you won’t be able to control.

Do It Now

Since you won’t know everything about retirement until you get there, you should make the most of what you do know. Your employer’s plan is an opportunity to save and invest for retirement. If you decide you can do more now for the future, make the changes soon.

Your situation is unique, so be sure to consult a professional before taking action.

Where Your Money Might Come From

33 percent Social Security

32 percent Earnings

10 percent Savings and investments

21 percent Pensions

4 percent Other

Source: Fast Facts and Figures About Social Security, 2016, Social Security Administration

Peter D. Shelp, AWMA®, ChFC®, CFP®, CRPC®, Kingston Retirement Group of Janney Montgomery Scott LLC, 270 Pierce St., Kingston. For more information, call 570-283-8140 or visit

Janney Montgomery Scott LLC Financial Advisors are available to discuss the suitability and risks involved with various products and strategies presented. We will be happy to provide a prospectus, when available, and other information upon request. Please note that the information provided includes reference to concepts that have legal, accounting and tax implications. It is not to be construed as legal, accounting or tax advice, and is provided as general information to you to assist in understanding the issues discussed. Neither Janney Montgomery Scott LLC nor its Financial Advisors (in their capacity as Financial Advisors) give tax, legal, or accounting advice. We would urge you to consult with your own attorney and/or accountant regarding the application of the information contained in this letter to the facts and circumstances of your particular situation. Janney Montgomery Scott LLC, is a full-service investment firm that is a member of the NYSE, the FINRA and SIPC.

Source: DST Systems, Inc.