Mostly Sooner Than Can Be Achieved...

by Jake Robinson
(Murfreesboro, TN USA)

I don't want to sound like a wet blanket, but most people want to retire much sooner than their money will allow...

I have been teaching my clients how to make good decisions with their money and with over 2500 personal clients and 12 years of sitting belly-to-belly and kneecap-to-kneecap I have gained an 'ear to the ground' perspective.

When I ask most people 'what age would you like to retire' - they generally laugh and say 'right now' or 'tomorrow' - we understand the sentiment... but when pressed for a serious answer I almost always hear "50" "55" - mainly a good bit before Social Insecurity should kick in...

I can tell you that basic math says most people are very lucky to be 'on track' to be able to quit at Social Insecurity (I know, I pick on this government program because most people my age - 46 - doesn't believe it will be there) and have enough money to enjoy a lifestyle they are accustomed to for the rest of their life without running out of money!

It's better to start 20 years ago to save, but by all means start saving now! I feel really bad for the 55 year old who comes to me to 'start' planning for retirement - the sad news is, if you haven't started at that age then you have two choices - get in shape and choose either Wal-Mart or McDonald's or extend your retirement age to about 75 in order to have enough time to try and catch up...

Pure math says it is very difficult to save on a monthly basis and actually accumulate enough money at a bank or a pension - unless you receive a good rate of return (10% to 12% per year) - and this means saving the amount per month needed to accumulate your 'pile' that will help you hit the your minimum goal...

So, after the many families I have educated over the years I have had to deliver more 'bad news' than good - "you have work to do" to get on track... The good news is - there are steps you can take to figure out exactly what you need to be saving based on your age now and the age you want to retire (using some benchmark assumptions) to get to your goal...

So what is the question to 'what is the average age a person retires?' - it's two fold: The age we want to retire vs the age our planning will allow us to retire...

Brutally Honest,

Jake Robinson



Wendy's comment: Thank YOU for being brutally honest. I just read a book on vacation -- "But What If I Live? America's Retirement Crisis" and the statistics are mind boggling. I've often wonder WHAT will happen 5-10 yrs from now when all these boomers retire, thousands of them, with little to support themselves?

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Houston (Washington DC) we have a problem!
by: Jake

"I feel your pain" - There are many folks whose best laid plans are laid to waste from unexpected health issues and unforeseen challenges... It is very noble of you to take care of loved ones. For those of you who have not experienced a major calamity like this – consider this a call to protect yourself with products like Long Term Care insurance - basically insurance for your 'retirement money' - it will pay a monthly benefit for home-based health care, assisted living or nursing home stays which can romp through your retirement savings before you can say "Medicaid"...

The problem with wanting to save Social Security is a double-edged sword... the demographics of the Baby Boomers will plain overwhelm the ability to fund it... A baby boomer turns 67 every seven seconds... today there are only 3 people working and paying into the system to take care of one person drawing out of it... in just over 15 years it is predicted there will be one person working to pay for one person taking out - explain how this will work? It won't and the system will just go bust... the only other way is to tax the heck out of workers now... this is untenable. The other side of the issue is to 'privatize' the system, or at least let folks who want to opt out of paying into SS and let them choose equity-based programs with limitations to put their FICA payments into (Approved mutual funds). I would elect to do this in a heart beat because I know I would have way more available for retirement than what an inefficient red-taped, bloated bureaucracy can provide...

You are correct that we need to pay attention and attempt to fix the problem – I like the idea of ‘adding a savings program’ – even better – replace SS with a true savings program that will unleash massive power to grow your own funds with certain guidelines… but we need to be responsible for ourselves and begin to invest now and not get to the 'magic number' with our hands out to the government saying "I don't have any funds to rely on - where is my government paycheck?†I know this is harsh but you best protection is to get financially educated and put your own plan in place NOW!

Thanks for your input and I hope folks will take heed and take action.

Cheers,

Jake
Mostly Sooner
by: Anonymous

I retired at 67 1/2 and would have worked longer but my Mom was in a nursing home miles away
and I wanted to be able to visit her, and my husband was beginning to have serious medical problems. I believe most of don't wait until we
can afford to retire. More likely we have health issues,have been downsized out of job, or just feel burned out.
Boomers should not accept the concept of Social Insecurity, that is, the idea that Social Security will not be there for them. They need to be involved with the decisions being made by our
leaders. Join a grassroots group like AARP and
keep in touch with our Congressional representatives and State legislators. We may have to add a savings program or make other changes to keep Social Security in the future.

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