A growing number of Americans are being left "on their own" to figure out how they will support themselves in their old age.
The 2012 Retirement Confidence Survey released by the Employee Benefit Research Institute in September revealed that baby boomers and members of the generations that follow are realizing that 70 is now the new 65. In other words, many working Americans no longer believe they will be able to retire when they are 65 years old. Rather, they "hope" they will be able to retire when they are 70.
And most workers haven't saved enough to support themselves in retirement.
But don't write these people off as free-spending moochers. These are people who have been battered by the worst financial downturn this country has had since the Great Depression. Many have lost jobs and watched their savings disappear.
Some of their homes -- which in the past had been regarded as "nest eggs" that would hatch retirement funds -- are not worth the amounts still owed on the mortgages. With foreclosures rampant, many people are no longer homeowners.
Most private companies have long abandoned pension plans in favor of under-performing 401(k) savings plans. And a movement is sweeping the country to spread this uncertainty to public sector employees, who may see their defined-benefit pension plans disappear or be diminished.
Many people in Generation Y (18 to 34 years of age) are unemployed or under-employed, and burdened by student loans. If they have jobs that provide 401(k) savings plans, they have little left over after paying bills to contribute.
And with all the political debate in this presidential election cycle, it's anyone's guess what Social Security and Medicare will look like in 15 or 20 years. A poll released by the UCLA Center for Health Policy Research in September revealed nearly three-fourths of middle-aged Californian voters say they could not afford three months in a nursing home, and nearly half say they could not afford even a single month.
The most common question I receive from my financial planning clients is: How much will I need to save for retirement? The answer is: That depends on many factors, including your age when you begin saving; at what age you want to retire; and circumstances that crop up in the course of living, such as health and financial setbacks.
Fidelity Investments in September released its new retirement savings guidelines: Workers should save at least eight times their salary by the time they retire at age 67 in order to replace 85 percent of their pre-retirement income.
With today's economic challenges, this won't be easy to do. But it is imperative Americans take control of their futures.
* Become "financially savvy." Educate yourself. Take classes.
* Read financial news reports.
* When selecting a financial advisor, make sure he or she will educate you. In other words, become a member of the investment team, not just a passive observer. Ask questions. Make sure you understand your investment strategy.
* Use a variety of investment strategies.
* Start saving NOW. It is never too late.
Steven Van Metre is a Bakersfield financial planner who specializes in retirement income strategies and teaches a course for the Levan Institute for Lifelong Learning at Bakersfield College that begins in October. His website is www.MyRetirementPlanningCoach.Com. These are his opinions, not necessarily The Californian's.