It may not sound enthusiastic; however, it is a bitter fact that most of the people do not have sufficient amount of money in their retirement fund at the time of retirement. This fact holds good for both middle and high range income earners. Often people invest their hard earned money on the advice of some consultant or agent, whose credibility they do not bother to check.
To get an idea of approximately how much money a person need to have in his or her retirement fund, simply multiply the annual income at retirement by 20. Since most of the people approaching retirement age do not have anything near to this value in their retirement fund, they are forced to rely on Social Insurance for their livelihood post retirement.
Many people think that they will be able to overcome the issue of insufficient retirement fund by extending their working age. While thinking so, they do not take into consideration another hard fact that as you age, it becomes more and more difficult to get hired. Moreover, the possibility of early retirement due to poor health of self or spouse or due to job loss is also not factored. This lack of planning is the sort of mentality that leads seniors into having to take out payday loans in their old age instead of having a solid financial foundation to lean on.
The government policy of the past 30 years with respect to retirement plan of individuals also needs drastic remodeling. This plan has failed because it has relied on the expertise of the individual with little or no financial knowledge to build up their retirement fund. Instead of this, professionally managed guaranteed retirement account with guaranteed return and annuity payment should be introduced for individuals immediately in addition to the Social Insurance. It is high time that we come together to solve this very important issue which affects all of us.