Retirement saving like it’s 1979
Posted on September 20th, 2007 – 3:50 PMBy Kara McGuire
I spent the past four days in Washington at a fellowship examining retirement issues in the 21st century.
I learned some, debated some and came home with lots of data about the graying of our society.
For those of you living on another planet (or another generation who wrongly believes these issues have nothing to do with you), the gist is that there are a lot of people about to enter their senior years, that they are living longer, that health care is growing more expensive, that they aren’t saving enough, and that they might run out of money unless they work longer (if they are healthy enough to do so and can find employers willing to hire them).
As I sat listening to presentation after presentation about these issues, I started reflecting upon my own savings. I’m not expecting a 30 year retirement consisting of travel and bingo (although I’m game for both). I figure I’ll earn some money doing work I enjoy until I’m at least 70 if i’m healthy. Yet I am always planning for retirement using calculators designed for a “retire at 65 and you’re done” mentality.
Does that mean that I could possibly be saving too much? Yes, especially if my husband and I both see our pensions and and if Social Security survives and if we stay healthy and if we get an inheritance or help paying for college and if the market doesn’t tank right as we retire and if and if and if.
This is my long-winded way of saying that I’m going to keep saving under the old paradigm because I don’t want to be someone who outlives her money.
On the other hand, check out this chart from a presentation given by Barbara Bovbjerg from the Government Accountability Office. It basically shows that if a 35-year-old today delays retirement, the percentage their salary they need to save drops from around 12 percent per year if hanging it up at age 62 to saving roughly 4 percent if they plan to work until age 70.
Do you think you’ll retire after age 65? How do you imagine retirement will be like for Gen X and Y?
8 Responses to "Retirement saving like it’s 1979"
I’m like you, I’d rather err on the conservative side. Also, the money I don’t spend because I’m saving it is income I don’t get used to spending. I figure that it’s better to learn to be frugal now than to suffer a shocking drop in lifestyle upon retirement.
I’ll retire before 60 and travel, drink wine at wineries, eat at great restaurants, bike, go to great concerts and enjoy life.
What I won’t do is what most Gen X, Y and Baby Boomers will do: work until death - and that’s if the companies hire a 60+ year old.
No. We plan to retire well before 60 to volunteer work/part-time jobs perhaps. Might run into Jon at a restaurant or two. Might also be in a foreign country depending on the health of the USA.
Not encouraged by Gen X (me) or Y. I think most will have to work well past 70.
My goal is to save more than necessary so my wife and I (both age 30 now) can retire at 65. I expect that I’ll continue to work PT/intermittently beyond then as a consultant/trainer/professor in my field.
But I definitely want to be able to live comfortably, travel and bump into Jon and David during retirement. And if we are lucky enough to have them, spoil the crap out of our grandchildren, of course!
I always laugh when I see the comments about working until 70. My question is: Who
“Do you think you
We plan to shift careers, possibly to something lower paying, but definitely to something more flexible in terms of time well before we reach 65. We also plan to continue working at the more flexible jobs as long as we feel like we want to. This may mean we work until we’re in our 70s, or that we retire and begin volunteering in our 60s.
Savings-wise, this means that we save enough to retire early, but plan on not tapping the money until we are actually retired and not earning anything.
I choose a career that would allow me to work until I’m 85 for fear that I might need to. I’d really prefer to retire when I’m younger. I’m on track for traditional retirement age, according to one financial planner I spoke with last year. Sadly, my Dad recently tragically passed away and now I’ll likely double my net worth due to my inheritance, which will be mindfully invested in his honor.
