Is Anybody Ready For Retirement?
Posted by John Sheflin on Mon, Nov 23, 2009
Recent surveys from Wells Fargo/Wachovia and The Center For Retirement Research indicate that Americans, including people who should be pretty close to retiring (ages 50-59), are nowhere near ready to retire.
Of course, it's in Wells Fargo/Wachovia's best interest to scare people into using their retirement vehicles, but the numbers of many surveys are similar.
The Wells Fargo report indicates that pre-retirees (ages 50-59) estimate that they'll require $800,000, but they've only saved $300,000 (median). They plan on spending 10% of their retirement total each year, which is over double what most advisors recommend. So not only will this group have not enough money upon starting retirement, they'll also spend it quicker than most experts say they should.
With an organization like the Center for Retirement Research of Boston College, which has no obvious benefit from indicating a dark and stormy retirement outlook, I'm more likely to pay attention.
Their "National Retirement Risk Index: After The Crash" reports that 51% of households are now at risk of not retiring with a reasonable amount of retirement income. This is pretty scary, especially considering the many estimates that indicate social security's limited life span and the dearth of real pension plans.
To me, this is motivation to ensure my and my family's retirement comfort, because it tells me that the government will be no help. Even if the government wanted to help, they'll likely be helping the folks who starting planning for retirement too late, if at all.
Now my wife has been working on my inherent cynicism, which I consider, of course, realism. So I'll try to reframe this in a positive light. Hmmm. Hardly anyone has enough money saved for retirement. Many less companies are matching retirement funds. The folks in 401(k)s who had saved for retirement lost huge amounts in the stock market crash. Let's see... I got it! The beach will be empty because everyone but us will still be working!
Photo courtesy of jmenard48.