Should You Listen to Doomsday Retirement Studies?

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“Study: 43% won’t have enough in retirement – A new risk index suggests many won’t be able to afford their current lifestyle in retirement, but a little extra work or savings would help a lot” reads the latest be-scared-because-you’ll-live-out-your-retirement-in-a-cardboard-box personal finance article – but is it really something to totally freak out over? Read the title more carefully… “many won’t be able to afford their current lifestyle in retirement” is the key to that headline. If you’re making $60,000 a year and enjoying a $60,000 a year lifestyle, saving nothing for the future, then you shouldn’t reasonably expect that after you retire and stop working, you’ll still be able to live that $60,000 a year lifestyle. If you read the article further, you’ll see that even the term “at-risk” is a little strict – it refers to “households projected to fall at least 10 percent short of their income target (defined as 73% of your pre-retirement income) in retirement.” So if you only live the high life at $40,000 a year after you retire, you’re still “at-risk.”

Now seriously, retirement is a big deal these days because people are living longer, defined benefit plans (pensions) are dropping like flies, and the “gratification now” mentality that has led to the rise in credit card company behemoths (and generously fueled our economy) have changed the way everyone should approach retirement planning.

Here are some scary thoughts that are legitimate and should concern you: The median balance is $60,000 among households nearing retirement and Most workers don’t save for retirement outside of their 401(k)s. Certainly the topic of money is taboo, but discussing it openly now when everything is sunny is better than being forced to discuss it when doomsday arrives.

Take stock of your retirement situation and make sure you’re not going to be stuck without sufficient funds for the future. If you have parents or siblings, be sure they’re putting enough away for the future. Don’t let them (or you) become one of the 43%.

{ 3 comments, please add your thoughts now! }

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3 Responses to “Should You Listen to Doomsday Retirement Studies?”

  1. FMF says:

    The best thing people can do is START SAVING NOW!!! Don’t put it off. A consistent saving plan over a good period of time is a great way to make sure you won’t be part of the 43%.

  2. Star Money Articles for the Week of June 5

    Here are interesting posts and news this week from the MoneyBlogNetwork members and beyond: AllFinancialMatters tells us how to compute compound annual growth rate. MightyBargainHunter asks whether you should pay it down or ING it. Five Cent Nickel dis…

  3. c says:

    BUY Australian blue chips BANK stocks and hold them over your lifetime the magic rule of 72, with marvelous compounding effects and fully franked dividends(NO TAX).

    Presently any of the 4 big BANKS in Australia are fantastic investments.

    As only 8 banks in the WORLD have AA+ ratings, so now Australian Banks count for 50%.

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