Low Interest Rates Changing the Retirement Equation

GLEN MILLS, Pa., Nov. 22, 2011 /PRNewswire/ -- The average monthly social security check has gone up by 28 percent over the past 12 years, but the amount of savings needed to generate an equivalent income stream has increased more than eight-fold, from $163,000 in 2000 to $1.4 million today. This drastic shift, due to historically low interest rates, in the value of a social security check already has had a significant impact on millions of American families preparing for retirement.

Generating enough interest to double social security payments is now out of reach for the vast majority of American families. For many, this means considering income-planning options that would have been quite unorthodox a decade ago, including using IRA or 401(k) funds earlier to avoid taking social security benefits earlier than necessary.

"Going along with 'business as usual' is not a sound retirement planning strategy today—it's a significant risk in this economic climate," says retirement planner Daniel A. White. "When the landscape changes, seniors and those approaching retirement age need to adjust their strategies and not be afraid to try new or different methods to achieve their goals."

Maximizing income streams has become a much larger focus and deferring social security payments until the age of 66 has become much more attractive: a more than $500 increase to a $2,000 monthly payment awaits those who can use other funds to make up the difference.

Today's retirees face multiple challenges with lower housing prices and rising food, transportation and health care costs, making it more important than ever to plan ahead.

For more information, please call 1.888.690.8820 or visit www.danwhiteandassociates.com.

SOURCE Daniel A. White & Associates