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Retirement Plan worksheet

Retirement Readiness

AngelaRoberts

Written by Angela Roberts

Dec 3, 2020

How well are Americans prepared for retirement? It is a question that has been on my mind lately as I have spoken with many people who are unsure about their financial futures. The Federal Reserve has some interesting data on the matter that they released in May of this year. In their annual “Report on the Economic Well-being of U.S. Households,” the Fed includes some information about retirement that stands out above the rest.

One fourth of workers have no retirement savings.

Given the importance of being prepared for retirement, seeing that a large fraction of what the Fed designates “non-retirees” are unprepared is what concerns me most.

The report claims that this number is age dependent, and people who are closer to “retirement age” are more prepared, but there is significant ambiguity as to when that retirement age will be, as the Fed’s own report states that “unanticipated life events contributed to the timing of retirement for a substantial share.”

More significant, however, may be the problems faced by those who are saving.

Of those who do have retirement savings, less than 4 in 10 feel their retirement savings are on track.

While many people put a lot of effort and money into saving for retirement, planning for economic instability and the rising cost of living, can make anticipating what you need difficult. This could be why millions of Americans feel dissatisfied with their current retirement trajectory.

Whether you are looking to make changes to your current retirement savings vehicle to gain more satisfaction or start saving for the first time, a self-directed IRA may be worth considering.

A self-directed IRA allows you to hold alternative assets in a tax-advantaged retirement account. In additional to stocks, bonds, and mutual funds, you can select more diversified asset options in a self-directed IRA, including real estate, undeveloped land, and precious metals. By allowing these other assets to enter the fold, you can diversify your overall retirement portfolio with more opportunities for growth. At the same time, your portfolio can be more insulated from the trouble seen in retirement accounts that hold solely paper-based assets and can be vulnerable to market volatility.

For Americans who want to make the most of their retirement—and perhaps avoid the pitfalls in retirement planning that millions seem to be facing—now could be the best time to consider rolling over a portion of a traditional IRA into a self-directed IRA.

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