February 20 – You’ve heard it before, Americans don’t save enough. Unfortunately, failure to follow this sage advice is going to mean a bleak retirement for many baby boomers, unless they get very busy. The Motley Fool’s recent article, “Prepare for a Gruesome Retirement”, shows just how pathetic those savings are. Of boomers aged 55+, 42% have saved less than $25,000, and only 50% have saved more than $50,000.
Those aged 45-54 aren’t doing any better – 44% haven’t saved more than $25,000. With very few years left to for heir savings to compound and grow, these boomers are going to be forced to accept a very low standard of living, or continue working long into the future. As a point of reference, a nest egg of $50,000 that doesn’t raid the principle will usually give you a whopping $2500 a year to live on (plus social security, and a pension if you one of the fortunates to get one).
The article goes on to list some dire scenarios that will happen if people don’t start saving and investing right away. They are definitely worth reading. Fortunately it ends on a high note: “You needn’t end up with a nightmarish retirement. Here’s the “tough love” part. If you take action now, you can set yourself up for a more comfortable retirement. So get going!” We echo that thought, particularly if you want to have a lot of options for your retirement lifestyle.