News Release

Early financial planning needed to help achieve retirement goals

FORT MYERS, Florida—A new study shows a large percentage of American workers are unable to retire because they lack adequate financial resources. The 2007 Retirement Confidence Survey, conducted by the Employee Benefit Research Institute, found workers unprepared for the financial impact of a changing U.S. retirement system.

A. Scott White, CERTIFIED FINANCIAL PLANNER™ in Fort Myers and president of Scott White Advisors, says many workers are counting on employer-provided retirement benefits that are increasingly unavailable. Almost half of workers saving for retirement report total savings and investments, not including the value of their primary residence or any defined benefit plans, of less than $25,000.

According to the study, nearly half of American workers are less confident about the benefits they will receive from a traditional pension. Only 41 percent of workers indicate they or their spouse currently have a defined benefit pension plan, yet 62 percent of workers say they are expecting to receive income from such a plan in retirement.

Because of changes in the U.S. retirement system, workers will rely on 401(k) retirement savings plans and other personal savings and investments to fund their retirement security, yet many are not able to retire because they have modest savings. “A large percentage of Americans are not aware of the problems the U.S. retirement system is experiencing, and many are not planning for their retirement needs,” White said.

With retirement benefits diminishing, workers are assuming more responsibility to fund their retirement years, yet many don’t realize it until the approach the time when they want to retire. “If current trends continue, workers who lack adequate resources for retirement will have only two options. They can reduce their standard of living during their retirement years, or continue working in retirement,” White said.

“If you think quitting smoking or losing weight is hard, try breaking a spending habit that took 40 years to develop. So working into retirement is the only viable option. And that brings with it many other concerns, such as staying healthy to keep working, pricing oneself out of the job market, and keeping up with technology,” he said.

The study reports that many workers expect to receive retiree health insurance through an employer, even though the number of employers offering this benefit to future retirees is declining. One-quarter of workers and more than one-third of retirees say they have long-term care insurance, separate from health insurance, Medicare, and Medicaid, to help pay for care they might need in a nursing home, assisted living facility, or at home. But only 10 percent of Americans age 65 and older are estimated to have had private long-term care insurance in 2002, suggesting that many are counting on coverage they do not actually have.

White says it’s important to plan for personal savings needed for retirement and also to evaluate IRA distribution techniques so workers can maximize how much they keep after taxes. “Financial planning is important for all workers, so they can potentially achieve their financial goals and retire on time,” White said. “A comprehensive financial plan includes savings, investments, estate taxes and liquidity, long-term care and disability, education funding, charitable giving, and retirement,” he said.

Scott White Advisors specializes in meeting the comprehensive financial and estate needs of high net worth families. White was named one of the country’s top financial planners by the Consumers’ Research Council of America. The firm is located at 1510 Royal Palm Square Boulevard, Fort Myers, Florida 33919; telephone (239) 936-6300. For more information visit www.scottwhiteadvisors.com. Securities offered through Raymond James Financial Services, Inc., member, NASD/SIPC.