A new report from an international economic development group says local and state governments will need to reform their pension systems as people live longer.
The report from the Organization for Economic Cooperation and Development says in the 13 countries that have mandatory private pensions, employees can expect to get about 60-percent of their earnings when they retire. The OECD says in countries where private pensions are voluntary, such as the U.S., workers can expect to see a significant drop in income after retirement.
Clark Bellin, a financial planner with Omaha-based Mundy and Associates, says it’s important to save as much as you possibly can toward retirement. "I think that people aren’t saving enough, I think they’re relying too heavily on the stock market or the bond market to do all the heavy lifting, and I think that even when they approach retirement age, they’re going to be not prepared."
Bellin says with the increase in life expectancy, someone retiring at age 65 might not have enough saved for retirement. He says a successful retirement plan will be simple, consistent, and focus on the long-term.
The OECD report says governments will need to raise the retirement age for their employees in order to meet the needs of pension systems.