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What to do about the changing retirement

RetirementAs we all know, retirement is changing for people of all ages.

In Consumer Reports latest look at the topic, “The New Retirement,” it discusses new approaches and reaffirms the need to start early to plan for the future.

The new reality of retirement shows that 401(k) plans are getting better, retirement advice is getting more reliable, savers can essentially design their own pension through an immediate annuity that guarantees cash flow, and those applying for Social Security can get far bigger payments by claiming their benefits the right way, according to Consumer Reports.

These items can help consumers craft a new retirement strategy whether they’re retiring soon or in the future.

“If you were young and working during the ’60s, ’70s, or early ’80s, you probably thought your own retirement would be the traditional life-of-leisure kind, but the era of the golden-watch goodbye is clearly a thing of the past,” said Tobie Stanger, senior money editor for Consumer Reports.

Baby boomers

The Great Recession disproportionately affected baby boomers, sending many into early retirement without sufficient funds, or pushing them to work longer than originally planned.

Thirty-seven percent of retired Consumer Reports subscribers left the workforce earlier than expected, and on the whole, they were less satisfied in retirement than those who’d retired as planned, or later, according to a survey by the Consumer Reports National Research Center.

Generation X

Generation Xers – born between 1965 and 1981 – are faced with financing their children’s education and paying off mortgages but still have time to ramp up savings before retirement. If they’re 50 or older, they can take advantage of catch-up provisions that let them contribute up to $24,000 to a 401(k), and $6,500 to an IRA.

The silent generation

The silent generation, born before 1946, are for the most part well into retirement, but have faced an unprecedented period of near-zero interest rates that has eroded the earning power of fixed-income securities.

A quarter of retired Consumer Reports subscribers said their retirement expenses were higher in their first year of retirement than they’d planned for; 45 percent said their healthcare costs were higher than anticipated, the Consumer Reports survey found. Those concerned about running out of money may want to consider a new, counter-intuitive solution that prescribes investing more heavily in stocks as they age, Consumer Reports advises.


Seventy-two percent of millennials with access to employer-based retirement plans are putting away money in those accounts, not far behind the 77 percent of Gen Xers, according to a survey by the Transamerica Center for Retirement Studies. They’re also starting to save earlier – at a median age of 22 – showing that when given the opportunity, millennials are good savers.

“Millennials with access to employer-based retirement accounts are beginning to save earlier in their lives than other generations did,” Stanger said. “If more of this generation is offered access to such plans, they actually may face an easier time in retirement than their parents.”

Websites that help with retirement planning are:, Social Security Administration;, California Teachers Association, go to the Projected Retirement Expense Calculator;, AARP, see the Social Security Benefits Calculator; and, T. Rowe Price, see the Retirement Income Calculator.

For more information on new strategies and tools to reroute retirement plans, read “The New Retirement” story at, or in the January 2017 issue of Consumer Reports available on newsstands and in libraries.

Copyright 2016, Rita R. Robison, Consumer Specialist


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