Insuring Your Future So You Do Not Come Up Short

According to a recent study, many U.S. workers who fall into the baby boomer and generation Xers groups are apt to struggle to handle basic expenses during retirement. Leading many to wonder what they will do.

If you find yourself among this group, possible solutions include annuities and a solid life insurance plan to protect your loved ones should you become permanently disabled or even die.

The study from Washington-based Employee Benefit Research Institute notes that more than 40 percent of individuals with the lowest incomes are looking at prospects of depleted savings within a decade after retirement, with that number headed toward 60 percent following another decade.

When it comes right down to it for many workers, having savings in a 401(k) plan or similar retirement scenario can provide the difference between security and challenges in retirement.

According to a spokesperson for the EBRI, how long an individual has been in a 401 (k) plan is the top factor showing if they will have enough retirement income.

Even those high-income workers cannot totally escape the financial challenges as they age.

EBRI's retirement-readiness rating for 2010 indicates that the pair of top earning groups is looking at a significant; if smaller, risk of not being able to meet basic expenses and medical expenses later in life. One of the biggest challenges later in life will be nursing home costs, according to EBRI.

According to EBRI's spokesperson, the warning comes even though there have been improvements in retirement savings levels dating back to 2006 when numerous employers added automatic enrollment for 401 (k) plans.

Over the last two decades or so, a large number of U.S. companies have frozen denied benefit plans that pay out a fixed monthly annuity in favor of financial vehicles like 401 (k)s whereby a worker sets aside pretax dollars to construct a retirement nest egg.

As it turns out, a large number of workers are dealing with 401(k) balances that continue to be small.

The results are centered on a model weighing data that includes age, income, retirement contribution tendencies, savings plan alterations and employee behavior derived from a database of 401(k) participants.

When looking at these factors, EBRI discovered that 47 percent of the early boomers (now aged 56 to 62 and closing in on retirement) are apt to go through all of their retirement savings.

Late boomers (now aged 46 to 55 and Generation Xers who are defined as being between 36 and 45 years of age) run close to a 44 percent chance of coming up short financially.

As is the case the estimate of "at risk' individuals has dropped in the last seven years, when EBRI last put together its readiness survey.

If you are having questions about your financial future, consider annuities and other financial vehicles to lessen your anxiety.