Contradictions Abound: Now There’s a Study That Says Retirement Savings Are Adequate

I’m starting to think that a lot of these “studies” are a waste of time.

Today’s Wall Street Journal has an article (FREE) highlighting a study that says Americans ARE adequately prepared for retirement. (I’m in the process of locating the study and hope to link to it later) This particular study goes against the grain of what other studies have said. However, keep in mind that a lot of the other studies were funded by companies that have a vested interest in getting people to save more money.

Regardless, I’m to the point now that I think these studies, unless they are used for national purposes, are useless. Retirement planning is PERSONAL. In other words, each person has to take responsibility to find out whether or not they are prepared for retirement. What’s good for me is not necessarily going to be good for you.

The point of all this?

  • Start saving for retirement now. The younger you are, the better off you’ll be if you can get started now. If you are older, start saving NOW! Every little bit will help.
  • Save as much as you can WITHOUT getting yourself out of balance. Enjoy life. The main thing is to not get caught up in credit card debt or to live outside or your means. There’s nothing wrong with having a nice house or a nice car as long as you can afford it (by “afford it” I mean that you are saving money for retirement).
  • Make sure you are investing appropriately for your age. The longer you have until retirement, the more you should be invested in stocks and less you should have in bonds. There’s no set allocation for everyone. Again it is a personal choice.
  • Review your retirement account once per year. Is your allocation out of whack?

Although the studies are fun to look at to compare your situation to the national averages, the most important thing to focus on is YOU.

5 thoughts on “Contradictions Abound: Now There’s a Study That Says Retirement Savings Are Adequate”

  1. I’m kinda split on the subject. In casual observation of family and friends, clearly there are many people who are livng for today and not concerning themselves too much with tomorrow. Despite the hype, I don’t think the crisis will as great as predicted. That said, a lot of people won’t be able to retire when they’d like to or in the style they’d like to.

    People will be rescued by a couple of things:

    1) Their kids will have to help support them – Maybe not fair, but its reality and well within the historic norm.
    2) Tapping their home equity (i.e. rev mortgages, downscaling, selling and moving in with the kids, etc.) Planners seem to completely ignore this potential source of funds). I call it the safety valve in my own plan.
    3) If the above isn’t enough, then they’ll just have to work longer or work part-time (even a couple of yrs makes a huge difference in retirement calculators).

    The biggest wildcard will be healthcare costs, which hopefully the govt. will have figured out in a couple of decades (by the time I retire if I ever do).

  2. The problem with healthcare is that the solution of insurance for everyone is not a solution. Health insurance has done nothing but drive the cost of care up due to paper work and the fact that it has taken the control out of the patient’s and doctor’s hands.

    There’s no doubt that we are going to face some very difficult choices in the future in terms of healthcare.

  3. “Retirement planning is PERSONAL. In other words, each person has to take responsibility to find out whether or not they are prepared for retirement.”

    Agreed, but how other people handle, or mis-handle, their retirement will affect me personally if it means that they become dependent on the government through subsidies, handouts, and the like — paid for by my tax dollar.

    Couldn’t agree with you more about healthcare. There are a few medical arenas where the costs have plummeted, with quality rising: elective plastic surgery, and lasik. I probably don’t have to mention it, but insurance doesn’t cover those procedures. The patient feels the cost, shops around, forces competition, and costs go down while quality goes up.

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