2013 New Year’s Resolution – Start Your Retirement Income Planning Now

Written by Julie Cole, Conservation Analyst

In 2007, the U.S. Senate Special Committee on Aging asked the Government Accountability Office (GAO) to report on how American workers are fairing with their plans for retirement. The GAO interviewed a wide variety of financial planning professionals, Department of Labor officials, Social Security administrators and actuaries, academic researchers, and state insurance commissioners, asking for their input. The results were published in a 2011 report titled Retirement Income: Ensuring Income Throughout Retirement Requires Difficult Choices. The report identified four critical mistakes that retirementpeople continue to make when planning for retirement:

  1. People are not starting early enough to save for retirement.
  2. People are choosing to start receiving social security benefits before they reach full benefit age.
  3. People are not planning for a 30-year retirement.
  4. Most people are not seeking or getting advice from qualified professionals about how to convert their retirement savings into retirement income.

Individuals continue to delay saving for retirement. This is evident by two things: 1) At year-end 2009, the average 401(k) balance for workers aged 60 to 70, with at least 30 years of job tenure at their current employer is about $200,000. 2) Approximately 30% of individuals over the age of 65 are dependent on full-time or part-time employment to maintain their standard of living.

Current social security statistics indicate that 43% of eligible retirees start their SSI benefit within one month of their 62nd birthday. A total of 73% take their benefit before age 65. Only 14% start their benefits when they reach full retirement age. Three percent start their benefits after they reach full retirement age, but before age 70 and 10% delay receiving SSI until age 70. By delaying the start of benefits to age 70, these recipients will receive approximately 75% greater monthly benefits than their peers who start receiving their benefits at age 62. This indicates that people reaching age 62 are not aware of the actuarial statistic that they will live another 23.5 years.

In a 2008 survey of 10,000 baby boomers, 88% of them indicated that they did not receive or do not expect to receive any inheritance from their parents. This is because their parents have used up or are likely to use up all of their savings and assets.  Many boomers indicated that their parents did not anticipate either the high costs of long-term care or that they would live well into their 90’s.

Most people don’t have a plan for retirement income. Financial Planners consistently recommend two strategies to guarantee a higher retirement income: Delay the start of social security benefits to age 70 (when health permits) and increase “annuitized” income. Yet, only 10% of retirees delay the start of SSI benefits to age 70 and less than 5% of retirees use income annuities to provide a guaranteed income.

Following the release of the 2011 report, the U. S. Senate Special Committee on Aging asked the Financial Planning Association for help. They posed several important questions:

  • How can financial advisors do a better job serving “middle  class America” in pre-retirement planning?
  • What are planners doing to reach people and provide help with a strategy for retirement income?
  •  How does long-term care financing fit into a retirement income plan?
  •  How can advisors engage people to think about what they need to do after they leave the job market (either from layoffs or voluntary early retirement) to get re-employed?

The GAO report stresses that, “Solving the retirement income planning problem is critical to the underlying financial stability of our country. Poor personal financial management will eventually affect everyone — not only the retiree — as the effects of poor decisions potentially place a heavier burden on public need-based assistance.”

Talk with your wfla advisor today about your retirement plan. Western Fraternal Life Association IRAs are an excellent retirement savings vehicle and wfla income annuities provide a guaranteed monthly retirement income that you cannot outlive. Put “See a wfla advisor and make a retirement plan” at the top of your list of New Year’s resolutions.

Spreading the Cheer!

Every year, the Fraternal Herald becomes packed with the unique volunteer activities of our members. This is especially true after the holidays, when the holiday stories come in. Many of the activities have become traditions for our members while some are first time events. This year we wanted to highlight one unique activity from each district that has done during the Christmas Season.


Mark and Mike on trumpet assisted by Natalie Stejskal

1. Lodge 67 Yukon, OK
Many lodges do a Christmas party, but this lodge stepped it up by creating a Christmas party program. It featured lodge members displaying their talents and skills for the partygoers.

 2. Lodge 330 Brookfield, IL
This lodge pulled double duty for their holiday activity. First, members collected Christmas cards from elementary school kids then distributed the cards to residents at a nursing home. The members then stayed to visit with the residents.

3. 56 Lynch, NE
The town became a little merrier after members from Lynch stopped by! Members decorated a gazebo with red and green big candy canes, cedar boughs, and red bows to spread some Christmas cheer.

4. Lodge 346 Willow River, MN
This lodge showed its creative side last holiday season. Lodge members made lap robes for Pine City Care Center and gave fruit baskets to area seniors, to make the holidays brighter for those in need.


Members wrap presents for needy children

5. Lodge 500 Cedar Rapids, IA
For many years, Lodge members at lodge 500 have helped wrap presents for Homeless Children’s fund by collaborating with HACAP (a non-profit that focuses on reducing poverty in a six county area).

 6. 365 Kewaunee, WI
Members decorated a Christmas tree in a holiday parade of lights in memory of wfla member Lance Corporal Dean Opicka, killed in Iraq. WFLA respects and honors every service member past, present, and future.

7. 181 Seattle, WA
The members of Seattle lodge 181 gave back to the arts community in their area last year. Members provided assistance at all four Nutcracker Ballet performances. The group helped with concession sales and ushering.

Each of these unique examples shows the diversity of the activities that can be done to spread cheer. What is your favorite voluntary holiday activity?