Why is the Retirement Glass Half Empty?

Retirement is going to be a disaster for most people, right? That is certainly the message that is out there in the media. I see articles all the time that you need millions to retire, and even that will not be enough! Let’s take a look at the “glass half empty” side of retirement.

We aren’t saving enough

We hear this all the time and in many cases I’m sure it is true. It is certainly true that the earlier you start saving in life, and the more you save the easier it is to build your retirement next egg. It is also probably true that if you are behind where you want to be it pays to save as much as you can to catch up. However the reality is that life gets in the way of the best of plans, and maybe you find yourself in a position where you aren’t where you want to be. There are millions of people out there where long term careers came to an abrupt end as a result of the financial crisis and they are still recovering for example. So don’t beat yourself up!  Deal with things as they are, not as you wish they were.

The Financial Industry

Many in the financial industry have good intentions when they sound the alarm that we aren’t saving enough. I fear sometimes the scare techniques may cause people to just give up. If the industry says know your retirement number (how much in retirement assets you need,) and you know that multimillion dollar number is something you will never reach, it is easy to give up. That is a real danger. Some saving and planning is always better than no saving and planning. Don’t forget too that the financial industry makes fees on most every dollar you save!

The role of debt

The financial industry on average says you need about 80% of your pre retirement income in retirement. I’m not a financial advisor and won’t argue the numbers but I think the amount of debt going into retirement makes a big difference. There is a big difference between a person entering retirement with no debt than one with a big mortgage, home equity loan, car payments and a wallet full of credit card debt!

Big ticket must haves

Maybe the big retirement numbers assume some big ticket retirement must haves. For example not everyone needs to travel the world in luxury. There is nothing wrong with that goal if you can afford it but some may be just as happy with lots of more affordable domestic trips. And not everyone needs a 70 foot sailboat to be happy in retirement.

Healthcare and long term Care

This one probably scares me the most. Probably the best we can do is do whatever we can do to stay healthy, and elect leaders that are brave enough to address the healthcare concerns of retired people. I know this is easier said than done. Here in the US we all know people who have had their life savings wiped out by a major illness, or taken by a nursing home in their last few months of life. It just isn’t right.

Retirement definition is wrong

This one you have heard before if you a regular reader of this blog. The point is that everyone’s definition of retirement is different. Some plan to work part time and some plan to never stop working. Retirement for them just means doing things a little differently.

Maybe I am a little too optimistic in thinking that planning and work can make many retirement situations work out. And I sure don’t want to diminish the real financial and healthcare challenges that many retirement people face. I have come to believe however that worrying too much gets in the way of life.

What do you think?

Until next time…