Talking Retirement

5 Stupid Reasons Not to Save for Retirement

20% Haven’t Started to Save for Retirement

According to a new Wall Street Journal poll, while 90% of people say they plan to retire, only 80% are saving to do it. The survey also indicates that people are starting to save at a younger age.

While the mean age for beginning retirement planning is 33.3 years old, young people say they are planning for retirement earlier. The median age at which 18- to 34-year-olds begin planning is 23.6; for 35- to 44-year-olds it jumps to 29.1; for ages 45-54 it is 35.6; and for those ages 55 and older, the median is 42.8.

Read more about it here.

More About Saving Too Much for Retirement

No one can know for sure how people will fare in the future. That will depend on people’s lifespans, investment returns, inflation, the cost of housing and medical care and many other unknowns. But people have to plan as best they can despite the uncertainties.

The article then goes on to talk about the problem of saving too much.

Kotlikoff argues that if a typical household of modest means overestimates its cost of living in retirement by 10 percent, it will have to save so much that its current annual expenditures would have to be reduced by 30 percent.

There seems to be some overlap of information from the New York Times article, but it’s still worth the read. Read the article here.

The Generation Gap: 70-Year Olds vs. 90-Year Olds

MSNBC has another interesting article this week, this time about the generation gap between the people who are just now moving into retirement living spaces and the generation before them that has already been calling those places home for a quite a while, Old and the restless clash in retirement homes.

They are clashing over such things as dress codes, the food, the conversion of tearooms into coffee bars, and higher monthly fees to pay for the weight rooms, roomier quarters and computer-ready apartments demanded by the younger, more active set.

If you’re living in a retirement community or have a parent in one, this might not be news to you. Read the article here.

The Benefits of a Gradual Retirement

Ease Into Retirement, a Motley Fool article featured on MSNBC, takes a look at a gradual approach to retiring. The idea of being a full-time employee one day and a full-time retiree is a thing of the past for many people.

The article discusses the benefits of phasing down your time at your job, like negotiating to keep your health insurance for a longer time. Working part-time may also allow a person to delay the start of collecting Social Security. Why would you do that? “If you start receiving Social Security at age 62, your benefits will be reduced by $1 for every $2 you earn above a certain limit, which happens to be $12,960 for 2007.” Want to know more? Read the article.

The Problem With Your Retirement Planning Calculator

What Makes a Good Retirement? Unsurprisingly, People Disagree.

An Ipsos Reid survey of 1,201 adults found 26% think they’ll need to amass between $1-million and $5-million to “retire rich.” An equal percentage (26%) felt they could do so with less than $1-million.

However, 5% believe they’ll need between $5-million and $10-million and 1% think they’ll need more than $10-million.

Huh? That left me scratching my head, but I like how the author the article sums up all the different thoughts. “In my experience with the industry and the investing public, when someone says ‘it’s not about the money,’ I make a mental note to myself: ‘It’s about the money.’” I agree. Read the article here.

6 Strategies for the Retirement Savings Game

U.S. News & World Report has Take Time to Review Your Retirement Game Plan this week. The article outlines 6 strategies an American should follow when it comes to the retirement saving game.

1. Contribute to an IRA.
2. Max out your 401(k).
3. Set a retirement savings goal.
4. Examine your investment portfolio.
5. Review your Social Security statement.
6. Plan for the financial transition.

The Change in Early Retirement Dreams

Early retirement requires a greater level of planning from the Chicago Tribune explores the change in attitudes (and the change in reality) towards retiring early over the past decade or so. Basically, the tech stock bubble made many feel rich with dreams of checking out of their careers early to retire to a life of leisure at the gold course. That’s changed, according to the article, with “a more likely scenario than early retirement is finding part-time employment to supplement savings and pensions.” Read the article for the full story.

Seven Percent of Retirees are Millionaires

The article Why U.S. Insurers are Crazy Over the Retirement Savings Market, from InsuranceNewsNet, covers how insurance products will be changing to meet the needs of the wave of boomer retirees entering retirement. Basically, the insurance products out there right now can’t meet the demands of retirees and things will get better. Better products. Intense competition. Mergers in the industry.

The article also includes some interesting statistics about the financial state of retirees.

Approximately seven percent of retirees are millionaires, 19 percent have assets that are worth more than $400,000, and one-third have assets that are worth more than $200,000, and retirees today, are quite unlike retirees from previous generations.  Today’s retirees are better educated, wealthier, more active, and healthier.  They work and travel, and more often than not, they work because of their passion to continue contributing and enjoying a sense of purpose.

Read the entire article here.