Tuesday, March 29, 2011

Future Bleak In Regards To Retirement

What Does Retirement Really Mean to You?

Knowing how you want to spend your retirement is crucial for knowing when you can afford to retire

Randy Myers

So you’d like to retire in a few years. What does that mean to you? Weeks at the beach? Daily rounds of golf? Globe-trotting? Or would you be content gardening, volunteering and visiting with friends and family near your home? Put another way, what’s a day in retirement really worth to you, and what will it cost?

Most people approach retirement with one question: Can I afford it? A better question: Can I afford it and still do what I want? If what you want is a front-row seat before your TV, fine. But if you want more, factor the associated costs into your retirement budget. Besides day-to-day living expenses -- food and housing, including taxes, utilities and maintenance -- don’t forget the following:

Vacations. Even retirees need an occasional break from the day-to-day routine. Renting a modest beach house for a week or going on a short cruise can easily cost several thousand dollars.

Health care. Without your health, the retirement you want may not be possible, so take care of yourself. The Employee Benefit Research Institute calculates that in retirement, a 65-year-old couple will need as much as $376,000 just to pay health care costs not covered by Medicare. Even if they’re lucky enough to have insurance from a former employer, they’ll still need as much as $235,000 to handle what’s not covered.

Recreation, entertainment, gift-giving. Golf and tennis, dinners with friends, weekend getaways, holiday and birthday gifts, a legacy for your heirs or favorite charities. All these cost money, and you need to budget for them.

Once you know how you’d like to spend your days, this simple three-step calculation will help you determine whether you have saved enough to afford it:

Multiply the size of your retirement nest egg by 4 percent -- the amount financial planners say you can withdraw each year, adjusting annually for inflation, without undue risk of running out of money. [What nest egg? Who can afford to save these days? -Dan]

To that result, add your expected annual income from Social Security and pensions.

From that sum, subtract your projected day-to-day living expenses, plus the cost of vacations, health care, and other discretionary expenses, for a year.

If the number you get is zero or, better yet, a positive number, you’re ready to retire. If not, you’ll need to work longer, save more, scale back your retirement plans, or undertake some combination of all three.

Fast Facts

1. More than two-fifths (41 percent) of Americans in the lowest pre-retirement income level will not have enough resources to cover even basic expenses and uninsured health costs after 10 years of retirement. [It will get worse, you can count on it. - Dan]

2. Almost half of all “early baby boomers” -- those now ages 56 to 62 -- are at risk of not being able to cover basic expenditures in retirement.

3. In 2007, the median value of 401(k) accounts for people under 35 years of age fell to $9,600, from $12,090 in 2004.

Randy Myers is a contributing editor for CFO and contributes small-business articles for MSN's Business on Main. He was a reporter and editor for Dow Jones News Service, a columnist for The Wall Street Journal Europe, and a contributor to Barron's. At Dow Jones & Co., he co-developed and became founding managing editor of A stock market newswire, Dow Jones Professional Investor Report (PIR).


First of all, you younger comrades better stop that,"I'm 25 years old. I don't have to worry about retirement for a long time" crap. Even at 25, you need to prepare for retirement. Besides, one day you're 25 and working out, dating, rock climbing, and surfing. The next thing you know you're past 60 and retirement is right around the corner. I found that one out myself, comrades. Sometimes I look in the mirror and think, "What the hell happened to my whole life? I've become my father!"

That's not even the problem. The problem is that in these worsening economic times, who can save for retirement? The situation will inevitably worsen. As far as the Judeo-Capitalists are concerned, we can get ourselves a sign and stand at a freeway off ramp, for all they care. As for ZOG, even for the very few of them who do care, what can they do to help us without money? Our social systems are already overburden because of leeches and illegals sucking it dry.

National Socialism has a retirement plan. Hitler was deeply concerned about those who served ably and faithfully, and had reached the age of retirement. However, even if we had a National Socialist state, it's not all up to the government. We have to prepare for retirement ourselves. It is difficult to save, but every little bit helps. The time to start preparing is at 25, not 65.

Dan 88!

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