As part of the Family Health Series on The Balancing Act Lifetime, we’re going to explore new areas of interest – Your financial health. Are you saving money? Are you financially ready for retirement? It is the single biggest challenge facing Americans right now; and to get as pointed in the right direction, we’re pleased to be joined this morning by Chris Grady, Executive Vice President at Athene Annuity & Life Assurance.
The Balancing Act Lifetime: Hey Chris, good morning to you.
Chris Grady: Hi there. How are you?
The Balancing Act Lifetime: I’m good. So, let’s start off by acknowledging that subject we’re going to discuss can be uncomfortable or confusing for some. But, I think we should just delve into this. In these tough times, it is hard for a lot of people to save. Especially for retirement. What do you suggest, for people who would like to prepare themselves?
Chris Grady: Yes, retirement is critical; because many people are going to spend more time retired than working.
The Balancing Act Lifetime: That’s a great point.
Chris Grady: If you don’t prepare and get ready for retirement, that amount of gap that you’re going to have when you do retire, is going to be a big problem.
The Balancing Act Lifetime: Such a great point.
Chris Grady: One way to handle retirement is to treat it like you were going to budget for a car.
The Balancing Act Lifetime: Ok.
Chris Grady: Let’s say you were going to save for your retirement. Pretend that you’re trying to buy a car; and instead, put aside $200 per month. Just save your money like it’s a budget. Another great key is to think about retirement is to treat it as not just an accumulation of money; but, rather, how much money you’re going to need to pay your bills.
The Balancing Act Lifetime: I think those are great points. Here’s another thought that I’d like your input on: More Americans, are living longer than ever before; therefore, we can assume that one may be alive longer in retirement, than ever before. What are the methods that people typically use for saving?
Most people say to themselves, “Oh, I have Social Security” and then “I might have a little retirement plan at work”. Well, if you think about Social Security for the average American, Social Security will only replace 20 to 25 percent of your earned income.
The Balancing Act Lifetime: That’s it?
Chris Grady: That’s it. And then you have your retirement and that might replace 5 or 10 percent. So, the person that’s making $50,000 a year from their employer plan or from the government plan, you might only get half of that. And if I asked anybody how would you like a 50 percent cut in pay? And continue to live, it’s not easy. So we think that filling that gap is critical.
The Balancing Act Lifetime: So let me ask you this, then. How do we know if we are saving enough money to retire the way we want, to kind of live at the same lifestyle we did when we were working?
Chris Grady: Everybody’s needs, goals, and wants are different. So, this is what’s critical. You have to evaluate what’s really a “need”. For example, your mortgage payment or your health care bill. And then determine what your “wants” are. Do you want to pay for your grandchild’s college? Or do you want to donate money to charity. So you’ve got to add the 2 up. You’ve got to figure out how much that is going to be a month and then you’ve got to prepare for having a solution that’s going to provide that income.
The Balancing Act Lifetime: I want to get into the tax issue, here, right now; because, how does that affect the way people are preparing and saving for retirement?
Chris Grady: Many people save for retirement with what I would call “incorrect products”. In other words, the government has already created incentives for annuities and they actually give benefits to annuities and 401k tax benefits. And these products are designed for retirement solutions. Many other products are more designed for “Oh, I’ll pay for college with that money.” Or, “I’ll pay for a new house or a vacation with that money.” That’s not what the retirement money is for.
The Balancing Act Lifetime: Ok. So let me ask you this, then. What is the biggest tip you would give to people who are tuning in, if you had to summarize everything into just one?
Chris Grady: Take control of your retirement. That’s what i would say. Evaluate it and treat it like it’s an important bill.
The Balancing Act Lifetime: And would you also say the earlier the better?
Chris Grady: The earlier the better. It’s never too early to start.
The Balancing Act Lifetime: Never too late either – huh?
Chris Grady: And it’s never too late. So the key is there are solutions for everybody, regardless of where you are in the life cycle.
The Balancing Act Lifetime: Well, great information. It was great to meet you.
Chris Grady: Oh great to meet you.
The Balancing Act Lifetime: Such great information on how we can make smart decisions for our retirement and our finances. And to learn more about retirement income planning go to atheneannuity.com and be sure to click into the consumer education section as well, a lot of great information there.
Now in its fifth year, The Balancing Act Lifetime endures in enabling women, in all aspects of their lives. The aim at The Balancing Act Lifetime is simple – It strives to benefit today’s contemporary woman “balance it all”, by bringing them outstanding resolutions to everyday issues. Viewers can watch America’s foremost morning show The Balancing Act Lifetime weekday mornings on Lifetime television at 7 am (ET/PT).