Avoiding the Retirement Crisis

My name is Chuck Oliver, a wealth architect and best-selling author, and I want to talk to you about the retirement crisis. The retirement crisis is very real. According to a 2013 study by the National Institute of Retirement Security, “The average working household has virtually no retirement savings.” In fact, the study found that 45% of working-age households (25 to 64) do not have any retirement account assets, and the median retirement account balance for these households is only $3,000. Additionally, four out of five of these households has less than one time their annual income in retirement savings. It’s not just younger adults either. Near-retirement households (55 to 64) were found to have a median retirement account balance of only $12,000, and over 63% of them were found to have less than one time their annual income in retirement savings.

So how do you avoid the retirement crisis? The short answer is that you educate yourself and start saving now. I’m here to tell you that the earlier you start saving, the better it will be for you in the long run. Let’s look at some simplified numbers to illustrate this point. These illustrations won’t include taxes, interest, etc., just simple savings numbers.

Saving Example 1

Retirement budget

Saving Example 2

Budget for retirement

Obviously, everybody’s savings goals for retirement are different, but as these charts illustrate, the earlier you start saving, the easier it is to reach your savings goals. It’s also important to learn the difference between planning to retirement and planning through retirement. You don’t just want to plan to reach retirement; you should plan to be able to enjoy it and live the retired life you’ve always dreamed of.

You should start by setting a goal (with or without a financial advisor) and figuring out the best way to pursue it. While it may seem like you have to deprive yourself of things today for some nebulous future, I believe that doing with less now will allow you to have a much better future when it comes. And it’s coming faster than you think!


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