What? you say.  I’m only *** years old and I’m not worried about retirement yet.  Well, you should be.  If you live long enough you will reach some magic age where retirement is a present-day reality.  That day will come much faster than you believe.

Think that between social security and your pension fund, you will be financially okay?  Don’t bank on it.  Social security is an iffy bet over the long term.  That fund would be in great shape if a former set of elected Democrats hadn’t started the process of raping it.  They took money out to support their pet projects and replaced the money with federal IOUs.  Once that promise of a secure and dedicated fund was breached it was easy for following administrations/legislators to continue the drainage. So now most experts project the system will be bankrupt in a few years.

The vast majority of retirement plans are grossly underfunded and the sponsoring entity has no way to rebuild it.

Well, okay, but you have a pension plan.  It may be a public/government plan or a private enterprise plan.  Either way, it is very much at risk.  Hundreds of plans are being cut back or totally failing each month. The vast majority of retirement plans are grossly underfunded and the sponsoring entity has no way to rebuild it.  To compound the problem, people are living longer and drawing more out of the pension funds than the funds were ever designed to support.  The most at risk are small communities/counties and teacher funds.  Also, funds managed by unions and companies that have their plans in a mutual management program. So, what are you to do?  Plan for your retirement by saving and investing (in addition to funding any formal retirement plans like a 401k or IRA).  The earlier in life you start, the easier the process will be and the more successful in reaching a comfortable retirement without relying on anyone else.

The reality is that few are really doing anything about the saving issue.  A 2018 survey by Bankrate.comm was very alarming.  Among the findings were:

  40% of households save less than 5% of their gross income;

  19% save nothing; and

  46% of millennials save zero.

A similar study in 2017 indicated that over 50% of households had less than $1,000 in liquid savings.

So, how much is enough?  Most economic advisors I’ve read recommend something along the following lines.

  You should have liquid assets to maintain you for at least 3 months.

  In your 30s  you should have 1 year of your annual income saved;

  In your 40s 3 years;

  In your 50s 6 years;

  In your 60s 8 years; and

  By 67 10 years.

The keys to getting there are not really very complicated, they just take commitment and consistency.  Always live below your means.  Manage debt and keep it to a minimum.  As your income increases don’t use the increase to raise your standard of living but increase your savings.  Keep your money working as hard as you do.

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