Is it just me, or can retirement experts really be downers?
So this book tells me that a million is not enough. This calculator ups it a notch and tells me what is enough: $4 million. Okay, well, I can save and save and count on the stock market to get me there, right? Not so fast!, this expert says. According to his (very sound analysis), stock returns will mostly likely be lower in the future than it has in the past. The real return of equity may hover around 3.5%.
It’s enough to make a girl want to throw up her spreadsheets and go buy shoes instead. But I can’t. Time is on my side – now. It won’t be forever.*
So if I save save save – with a hope and a prayer -and a cooperative market (down when I’m in the accumulation phase (i.e. now) and high-flying during my withdrawal phase), I’ll get there.
*Doesn’t that sound like the tagline for an appropriately depressing personal finance tome?
Your Financial Clock is Ticking: How to Save for Retirement Before It’s Too Late and You Wind Up On The Streets Eating Government Cheese
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This is why i am quite happy to sign up to my bank’s retirement scheme, choose the right package for my risk-tolerance, and then just let them handle it. The guy told me how much i have to put in each month in order to be paid back my current salary during retirement, and i’m aiming to pay that amount in a few years.
Past setting up my pension, i am happy to bury my head back in the sand once it’s up and running. :~P
I freak out at retirement calculators like that, too. I think my number is around $5mil, and (while not impossible) that’s pretty much a financial Everest.
Meanwhile, I think you should write that book. I’d read ANY book that mentions living on the streets and eating government cheese in the (sub)title.
This makes me beyond thankful for my husband’s work retirement plan – he works as a police officer in Ottawa, Canada, and since it is a government plan, it ROCKS. He’s going to get more from that than we would save for if it was all on us to save. So everything extra we save is gravy and that is delightful.
Geez, as if us women didn’t have enough to worry about, what with our “biological clocks” ticking….now the financial clock is ticking too?!! lol. (Not that my biological clock is ticking yet…)
Love the tagline though!
I hadn’t quite thought about a target number before. Up until now I’d just been happy putting 10% into my 401K and ROTH, and calling it a day. I guess I should look over this stuff a little more… =/
It really does freak me out, too, but don’t forget that the estimate is probably including inflation. I recently read that several decades from now, $1 million will actually be worth today’s $250,000. Maybe that’s just more depressing…
My target is “as much as possible,” really, but yes, I think I’m shooting for about that $4-5 million mark. I’m not sure that I can get on board with “right now the stock market is about to change forever,” but even if it does, I figure that how well one is doing is really about how well one is doing relative to other people, because if everyone is in the same boat (or, more properly, the same stock market), other things will rearrange themselves to suit the new, lower, ROI. Therefore, my policy: save as much as I can, don’t worry too much about things that can’t be predicted.
Ugh, tell me about it. My evil plan is to use the power of leverage wherever possible. Since I’m a real estate girl, I figure I just need about $600K to really get started. My ultimate retirement goal for my fiance and me is $6Mil in cashflowing property. The property SHOULD pay for itself. After 20-25 years, whenever the mortgages are paid off, we could sell and get the cash.
We’d live very nicely on $6Mil well into our 80′s and hopefully beyond…that is, unless $6Mil then is worth $5 now or something. You never know with the way inflation is going.
You own a very marvellous blog. But one question remains How do you handle the increasing number of Spam in blog comments? I really hate it, It steals lots of my time and I really do not like messing around with this every single day.