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After recent CBS News comments about CBS News Analyst Mellody Hudson’s discussion about the pluses and minuses of 401(k) plans, Savings2Income offers its input.
Bohemia, NY (PRWEB) February 22, 2013
On February 22, Savings2Income responds to comments in the CBS News discussion.
CBS News commenting on remarks by its analyst, Mellody Hudson, claims that many Americans have a 401(k) plan, but “when it comes to actually using that money towards retirement, some financial experts worry that it just won't be enough money for most people to live on.”
Mellody Hobson, the CBS News Analyst, offered a breakdown of a typical scenario: “[T]he average American family makes $50,000 a year, and when they retire the average amount of money they have in a 401(k) is $120,000. If you go to full retirement, you can collect around $1,200 a month from Social Security. She also said that on average, that savings plan creates an income of about $22,000 a year.
“This is not enough money,” said Hobson. The item points out that the 401(k) was originally supposed to be supplementary and differs from when Americans had access to pensions and predictable Social Security checks. She also advises that Americans should start saving as much as they can in the beginning, as the compounding for multiple years makes a huge difference.
Advising not to take money from their savings, Hobson said that “70 percent of people say they took out some money from their retirement accounts when they changed jobs” Hobson suggests “immediately rolling over the money to a new 401(k) or IRA as soon as possible when you change or lose a job, so you do not lose track of the money.”
Jerry Golden, developer of Savings2Income, responds to these comments. “While we understand that 401(k) savings may be the only significant savings some Americans have, it should be accessed only in a dire emergency. A key to improving the retirement situation for those people described by Ms. Hobson, and who are healthy enough to work beyond age 65, is to continue working until age 70, and delay claiming Social Security benefits until then. This will have a dramatic impact on both the amount of savings and the Social Security check. Further, they should be able to make smart decisions after retirement to maximize their spendable retirement income.
The innovative Savings2Income (S2I) retirement planning method developed by Jerry Golden seeks to provide a clear path to retirement security for those saving for retirement, soon to retire, and recently retired. S2I incorporates Rollover IRA savings, personal retirement savings held outside an IRA or 401(k) plan and Social Security into an integrated solution.
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