People planning for their retirement years face a number of challenges, including worries about increasing living costs.
While most working Americans recognize the importance of saving for the future, many have difficulty prioritizing it in the face of near-term financial stresses.
With that in mind, bestselling author and motivational speaker Tony Robbins has some compelling words of caution about Social Security benefits and the role they play in a retiree’s financial well-being.
If one is offered at their workplace, many people participate in employer-sponsored 401(k) plans as a primary source of retirement savings. Individual Retirement Accounts (IRAs) are also great vehicles through which to invest money because of their tax benefits.
Costs associated with Medicare are also a concern many people have. Americans can enroll in the health care program for seniors at age 65, and assuming a retired person has paid Medicare taxes during their working years, hospital stays are covered by Medicare Part A.
Medicare Part B, however, which covers doctor visits and preventive care, requires a $185 premium in 2025. For people with high incomes, that premium can be involve a larger cost.
Related: Dave Ramsey has blunt words on Medicare for retired Americans
An alternate option to Original Medicare is Medicare Advantage (also called Medicare Part C), which is health care coverage provided by private companies. This increasingly popular choice covers Part A and Part B costs, and often covers other services such as vision, dental and hearing expenses. It also frequently covers prescription drugs.
For Original Medicare, prescription drugs are covered by Medicare Part D. This is an important area of coverage, because retirees are of the age group where medicine is most frequently prescribed. Costs vary according to each individual’s medical needs.
To help people with decision-making, Tony Robbins identifies a major mistake some people make during retirement and explains how to avoid it.
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Tony Robbins warns against a Social Security ‘disaster’
Robbins explains that, in the early 1970s, the average length of retirement was 12 years. Now that number about 20 years.
He also cites a Center for Retirement Research study finding that 49% of American households are at risk for having too little money in retirement to maintain their living standards.
Robbins’ warning for Americans involves not making the mistake of assuming Social Security paychecks will be enough to live on when they retire.
“Failing to plan for retirement and just hoping Social Security will carry you through retirement is a recipe for disaster,” Robbins wrote. “Social Security was never intended to become a replacement for retirement savings, especially considering the extended length of retirement we can anticipate with longer lifespans.”
More on retirement strategies:
- Dave Ramsey has blunt words on Medicare for retired Americans
- Suze Orman offers candid advice on Social Security for retirees
- Personal finance author explains avoiding a big Medicare mistake
Robbins believes the first step to planning for the future is having a concrete understanding of how much money a person needs to retire.
The author explains a way for individuals to determine that number for themselves.
Related: Suze Orman has blunt words on Social Security for retired Americans
Tony Robbins shares how much money people need to retire
Many people saving for retirement focus on the financial resources they would need to maintain their current lifestyle.
To do this, Robbins wrote, people should first create a budget and track how much money they spend in a year. Then he recommends multiplying that number by 20 (the approximate average number of years people live in retirement).
Robbins also recommends people be conservative with their calculations, not overly optimistic.
Robbins then discusses the difference between having what he calls a “scarcity mindset” compared to having an “abundance mindset.”
He explains that a scarcity mindset focuses on needs a person has that are unfulfilled, referring to the material things and experiences that other people have that they don’t. Robbins suggested that this mindset tends toward short-term financial thinking and less fulfilling relationships.
“People with an abundance mindset focus on what they already have and make peace with the present moment,” Robbins wrote. “Because they’re not living in a state of fear, they experience the many benefits of gratitude and can make better decisions and plan for the future.”
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