Presenter: Sameer Samana, Senior Global Market Strategist, Wells Fargo Investment Institute
[Music plays; image of a cake with “happy retirement” written on the top; cake is part of a retirement party scene.]
Sameer Samana: Many retirees used to be able to depend on a monthly pension and social security benefit for life…income that was guaranteed and predictable.
[Scene changes to show Sameer, with on-screen text: Sameer Samana, Senior Global Market Strategist, Wells Fargo Investment Institute]
But planning for retirement today is much more complex…and likely with fewer guarantees than earlier generations.
[On-screen graphic titled “Shifting trend in benefit plans,” showing decline in employer-provided plans, like pensions, from 1990 to 2018, to 13% in 2018, compared with rise in self-managed plans, like 401(k)s and IRAs, over the same period, to 47% in 2018. Source: U.S. Bureau of Labor Statistics, National Compensation Survey. Percentage of full-time employees in private industry participating in Defined Benefit Plans vs. Defined Contribution Plans.]
The shift away from employer-provided retirement plans, like pensions…to self-managed plans like 401Ks and IRAs, has a lot to do with that.
So does the impact that living longer has on our finances.
It’s no wonder that preserving wealth throughout retirement has become an important topic for many investors.
Man at retirement party: “When I think about retirement, it’s really about the freedom to make my own choices, stability, and no hidden surprises. That’s really what I’m looking for.”
Woman at retirement party: “You know, it’s really tough between my two kids in college and my parents with their medical expenses, it’s just really hard to put money away right now.”
Woman #2 at retirement party: “It’s so crazy I have to think about retirement right now considering how young I am. But it’s only 30-40 years down the road. And I feel like I need to start somewhere.”
[On-screen graphic titled “Biggest increases in costs 1998-2018.” Items listed: Hospital services, 225%. College tuition, 185%. Child care, 162%. Medical services, 106%. Source: Bureau of Labor Statistics.]
Sameer: Research shows that whether your retirement is still years down the road…or just around the corner…chances are it may last longer and cost more than at any other time in history.
This will undoubtedly change the traditional retirement picture for many investors in the workforce today.
So how do you know what the right retirement strategy is for you?
Well, it depends on what stage of life you’re in.
[On-screen graphic titled “A generational approach.” Shows a path to retirement with information about generations. Millennials, born 1981-1997. Generation X, born 1965-1980. Baby Boomers, born 1946-1964.]
If you’re a Millennial, you’re still accumulating assets. Time and the potential power of compounding is on your side, so start saving early and take advantage of tax-advantaged retirement accounts.
If you’re a Gen Xer, you’re likely in your peak earning years. So think about increasing your savings contribution and paying down household debt.
And, if you’re a Baby Boomer, you’re close to, or in retirement. So, now is the time to consider reducing risk and creating a tax efficient plan for generating income that will help your money last for the rest of your life.
Man at retirement party: “Some of the best advice I’ve ever gotten was to contribute to my 401k—it was really an easy way to start saving money—and that’s really paid off now.”
Man #2 at retirement party: “You know when I was younger I wasn’t able to save that much. But now that we’re making more, we’re saving more, and I think we’re going to be OK.”
Sameer: Developing an investment plan is the key to being prepared for your retirement.
And we believe the best way to begin is by having a planning mindset…and taking action.
Remember…you’re in charge of planning for your retirement.
So guys, what are you going to do now?
Man celebrating retirement: “We’re going to do some traveling, see some places we’ve never seen, and spend more time with the grandkids.”
Sameer: “Sounds good.”
[On-screen text: To learn more, download our special report. Cover of report shown.]
To learn more about how retirement investing strategies can work for you, download our Wells Fargo Investment Institute special report: Reimagining Retirement: Generational Strategies for 21st Century Challenges.
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