You'll Never Retire!

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By Robert Brokamp (TMF Bro)
April 24, 2002

Abandon those dreams of a luxurious retirement -- lounging on the beach and drinking enormous Shirley Temples. The only way you're going to spend your golden years with sand between your toes is if you work as a lifeguard (mind your dentures when giving mouth-to-mouth resuscitation).

At least that's what the recent Retirement Confidence Survey (RCS) seems to indicate. According to the RCS -- which was released by the Employee Benefits Research Center, the American Savings Education Council, and Matthew Greenwald & Associates -- 70% of Americans are very or somewhat confident that they'll live a comfortable retirement. Yet only a third of those surveyed have ever attempted to calculate how much they should be saving. Additionally, 47% of working Americans have saved less than $50,000, and 15% haven't saved anything.

Though $50,000 may sound like a lot, especially if you found it in the birthday card your grandmother sent you, it won't last long in retirement. That's because personal savings will have to provide the bulk of your retirement income. We all know we can't rely solely on Social Security; as it is now, the average benefit is around $10,000 a year. And that will most likely be reduced as the baby boomers retire. As for the traditional pension (more properly known as a defined-benefit plan), it's going the way of the dodo as employers shift the burden and risk of retirement savings onto their employees.

So, if you want a comfortable retirement, you'll have to rely on the yolk from your nest egg. How do you make sure it's big enough for an RV with a Jacuzzi, or whatever dreams you have for retirement? Follow these steps:

  1. Complete this retirement calculator to see where your current plan will put you.
  2. Make sure you're contributing to the right accounts. If your employer matches contributions, put your money there first. If your employer doesn't provide a match -- or you're already contributing enough to get full benefit of the match -- then open an IRA.
  3. Consider taking an online seminar: Roadmap to Retirement for those of you a decade or more from retirement, or Rule Your Retirement for those near or in retirement.
  4. Take life-guarding lessons, just in case.