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Laura Rowley Money & Happiness

Laura Rowley, Money & Happiness

Rethinking Retirement Savings (or Not)

by Laura Rowley

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Posted on Thursday, February 15, 2007, 12:00AM

Conventional wisdom suggests that people are woefully unprepared for retirement. Study after study portrays most Americans as the proverbial grasshoppers, playing the fiddle with their finances while a minority of conscientious ants store up supplies for their golden years.

In 2004, for example, the Center for Retirement Studies at Boston College estimated that 43 percent of working households were in danger of having too little income to fund their retirement, even after tapping home equity.

Singing a Different Tune

Now a group of economists is offering a wildly contrarian view: People may be saving too much for their retirement. A few go so far as to suggest that the financial services industry is deliberately encouraging over-saving because it profits from managing such assets.

Consider a recent study conducted by Paul Smith and Lucy McNair of the Federal Reserve Board, and David Love, an economist at Williams College. They found that 88 percent of all households with breadwinners over age 51 had accumulated sufficient resources to finance adequate consumption in retirement.

A separate study by John Karl Scholz, an economist at the University of Wisconsin, Madison, and two other researchers found more than 80 percent of households headed by Americans born between 1931 and 1941 have accumulated their optimal wealth targets for retirement.

The other 20 percent missed their goal by a relatively small margin, according to the study published in the Journal of Political Economy.

The Wrong Message?

"I was very surprised by the research," says Scholz. "If you pay even cursory attention to the popular financial press, the message is that Americans are blowing it in their retirement."

His study looked at more than 6,000 Americans who took part in a detailed Health and Retirement Study, which surveyed them on income, job history, pensions, housing, retirement plans, health, family structure, and net worth, among other topics.

The researchers then constructed an elaborate "life cycle model" that captured key features of a household's consumption decisions, potential health shocks, survival probabilities, income tax liabilities, and projected Social Security benefits.

"The behavior underlying our model requires fairly sophisticated mathematics to solve," says Scholz. "It's a model professional economists use to think about this issue -- it doesn't translate into advice [for the consumer]."

The 'Rules of Dumb'

Boston University economist Lawrence Kotlikoff argues more economists should be developing tools to advise the consumer. "There is a risk from overdoing it when you're young -- you squander your youth rather than your money," he says. "It makes no sense to have huge bundle in your 401(k) and have not gone to Hawaii, or gone skiing with the kids. It's not all about the end game -- it's about the middle game and the short game, too."

Kotlikoff has created dynamic programming software for individuals, incorporating the kind of economic modeling used in academic research. Such models focus on "consumption smoothing" -- or putting away just the right amount to maintain one's standard of living over time -- rather than following rules of thumb, or what Kotlikoff calls "rules of dumb."

Kotlikoff suggests that people have been duped by tainted advice, and a small calculating mistake can become greatly compounded over time. "The simplistic calculators on companies' web sites are primitive tools that have no connection to modern mathematics or economic theory," he says. "Five-second financial checkups are really financial malpractice."

In his recent paper "Is Conventional Financial Planning Good for Your Financial Health?" Kotlikoff ran a theoretical household through the retirement calculators on the web sites of Fidelity, Vanguard, American Funds, and TIAA-CREF, and found the savings recommendations ranged from 36 to 78 percent too high, compared to his software's calculation.

Meanwhile, though many planners base their retirement recommendations on a steady level of consumption, a review of federal data found that seniors spend less as they age.

In an article in the Journal of Financial Planning, Wisconsin planner Ty Bernicke found Americans over 65 spent an average of 26 percent less than their younger peers. Bernicke cites research that suggests the spending cut is voluntary, rather than in response to a lack of resources.

'Optimal' May Mean 'Just Getting By'

But before you trade in your 401(k) contribution for a whirlwind vacation, consider a few problematic factors. First, don't confuse "optimal" wealth accumulation with opulence. Some people have enough to retire on only because they've had very low incomes throughout their lives, and Social Security replaces a sizeable chunk of their earnings. About one-third of retired workers depend on Social Security for 90 percent or more of their income.

For example, Scholz found that in the generation he studied, householders with the lowest lifetime earnings had an average of 4.6 children. "Suppose you have five children. When the kids are in the house, they're eating all of your resources," Scholz says. "Once the kids are out of the house and you adjust the consumption needs of the remaining couple, their optimal wealth accumulation is next to nothing. Social Security is replacing 60 percent of income. This rosy language of ‘optimal' still may mean people have austere standards of living in retirement."

In addition, Scholz's study examined people born between 1931 and 1941 -- a demographic group greatly influenced by the lessons of the Great Depression. One could argue that the event would inspire them to save more prodigiously than the baby boomers born between 1946 and 1964.

Moreover, if 88 percent of people over age 51 have saved enough to retire, as Smith, McNair, and Love's study indicates, why are so many people in their 70s getting up and going to work every day? The percentage of men age 70 to 74 who are still in the workforce has risen five percentage points over the last decade to more than 20 percent, according to an analysis by the Population Reference Bureau. Of that group, more than half were working full-time.

A Cautionary Approach

I suspect I'm one of the dupes who's saving too much for retirement. For years, I've followed a "rule of dumb" -- putting away 10 to 15 percent of my income annually. My goal is to replace 80 percent of my current income in retirement, excluding home equity and Social Security. (I'm dubious about the program's long-term sustainability.)

I may need less than 80 percent of my current income, since many of my costs will disappear in retirement: school tuition, college savings, the kids' extracurricular activities, the mortgage (and I won't need to save for retirement anymore).

But I err on the side of caution, because saving for retirement squeezes out luxuries -- a second car, better vacations -- rather than necessities. Economists should turn their research into more accurate models for people who could use additional funds today to stay out of credit card debt, or pay for education and other staples of life.

If anything, the rocket science of figuring out retirement needs underscores the importance of not scrimping on your health. Spend the money on the gym, a weight management program, or the smoking-cessation class today. Then, if you end up with too much in retirement, you'll have the energy to enjoy the windfall; if you end up with too little, you'll have a better chance that medical expenses won't put you into bankruptcy.

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  • Yahoo! Finance User - Friday, March 9, 2007, 8:21PM ET  Report Abuse

    • Overall: 3/5

    My problem is determining who do I really trust to advise me about retirement finances? One half of me thinks I should hire a fee-based financial planner, but then I have been told by annuity and investment counselors that many "fee-based" advisors actually get kick-backs from companies they direct you toward. Okay, then why should I trust someone who will sell me investment instruments (like the State Farm individual in a post below)? Isn't the primary bottom line for him the amount of money he and his company can make off me and that my bottom line is secondary to his? Who can you really trust with your future, especially if you don't even trust yourself to make the correct decisions? You may refer to me as "Mr. Financially Frustrated & Stuck in Fear." For that's what I am.

  • Yahoo! Finance User - Friday, March 9, 2007, 8:13PM ET  Report Abuse

    • Overall: 1/5

    The article didn't direct those of us who aren't prepared for retirement on where or whats a good way to put something away, it was redundant.

  • john - Friday, March 9, 2007, 1:18PM ET  Report Abuse

    • Overall: 1/5

    No specifics just general info. what have they saved how old are they, how long will it last etc.

  • Yahoo! Finance User - Wednesday, March 7, 2007, 2:03PM ET  Report Abuse

    • Overall: 3/5

    Savings can often be supplimented with a side business. Consider what would be suitable for you. Most people will succeed if it is not too hard. Check out http://jerkyd.blogspot.com

  • Joshua - Sunday, March 4, 2007, 10:17PM ET  Report Abuse

    • Overall: 1/5

    I am an Insurance & Financial Services Agent and have been for Ten years. I am also an Economist. One thing about the age group they studied, and fail to consider now is that a majority of workers born between 1931 and 1941 had defined benefit pension plans -- they got a set payment at retirement without making any contributions out of their own pocket. As you get further from those who are currently age 50, the number of people with pension plans decreases exponentially. Even many State workers in Michigan no longer have these guaranteed plans. This means that out of the "same" income cited in this study, that retirement need has to be met. While I wholeheartedly agree that cookie-cutter ideas are not the best solution to retirement savings, when are they ever? If all you are using is the free quickie calculator on a company website, you are only fooling yourself. The best retirement plan is one that takes into account your situation, where you are, have been and are going; your habits; and your desires. mortgage gone in retirement? Do I really need to tell you how many of my 48 year old customers just refinanced a 30 year mortgage? I can say one thing for certain: When I first meet with customers, they have a list of savings goals about a sheet of paper long -- and can currently accomplish maybe the first two lines. A majority of the people I meet with haven't even started saving for retirement at all -- or might have at most $10,000 saved in an old 401(k) somewhere. Even with social security, and very conservative projections for inflation and spending, many of them do not have enough money for more than 2 or 3 years of retirement at their current pace. Should you give up the second car? Well, it's all about opportunity cost. What is worth more to you? And the only person who can answer that is you - not any financial planner. Just as a side note, I am turning in my leased vehicle. I also recently bought a home only two blocks form my office. I'm purchasing an older vehicle so we have a second car "just in case." And I'm walking to work now. And saving an extra $400 a month. Some of that will go to reitrement. The rest, to paying off debts. So I will have more money to save. It's right for me based on my situation and what my needs are, and what I put the most value on. Put 10 people in my exact situation, and I can guarantee you that they will have 10 different ways that are best for them. And all of them will be right. You don't need to pay a lot of money to get good advice either. Most people have car insurance and if you have it through a company like State Farm, or Allstate, or some Independent Agents, you can often get advice on how to best utilize your 401(k) and other benefits through work, and how to be sure your overall plan is right for you. They also have advanced software, and planning divisions and experts they can coordinate with to do detailed projections and put together appropriate actions plans for you. And it is all usually free. I am the office manager for a State Farm Agent. Trust me -- if you are already a customer with your car insurance and home or other policies, I'm interested in giving you the most value I can - not just through products that I offer, but through the services I can provide -- which includes my knowledge of retirement planning. And if you hear a fee-based planner say nothing is free, remember that your State Farm, Allstate, Independent Agent Etc. are not free -- you are already in most cases paying them substantial premium dollars for their services via your current policies. It is in their best interest and yours to take advantage of all the help they can provide.

  • Alephs Vision - Friday, March 2, 2007, 5:40PM ET  Report Abuse

    • Overall: 5/5

    I have often been bothered by 'projections' of required wealth-levels for sustained retirement. Many of these 'projectors' appear to be talking to a small subset of the (american) population by stressing the need to set aside $1,000,000 or more. [a 40,000/year worker would have 25 years of income saved ... is this realistic? ... how can a factory worker accomplish this?] Saving is a necessity, no doubt. However, setting up "realistic' goals and methods would serve the general public better than "financial advice" (sic) targeted at the upper-income bracket only. So far I don't see it. I hope that this article will motivate some economist(s) somewhere to "get real" and talk to the majority of the American population. Eliminating credit-card debt is a great first step. It needs to be aid that "the financial market" comprises a very skillful set of used car salesmen ... uhhh .. 'proferssionals' who can lay cunning traps to take advantage of the financially unsophiosticated. When we were in grade school, most of were taught not to "take candy from babies" ... these guys make large incomes doing that very thing. Shame? Does MBNA feel ANY remorse over scamming the weak?

  • ThomasO - Thursday, February 22, 2007, 8:57AM ET  Report Abuse

    • Overall: 5/5

    Maybe the point of the article is not who is right, but the need to challenge conventional wisdom. Cookie cutter solutions need to be challenged. Get all the information you can from these alleged experts but decide for yourself what your plan of action will be.

  • Stephen M - Wednesday, February 21, 2007, 11:53AM ET  Report Abuse

    • Overall: 5/5

    We are getting some very contradictory advice from experts and statisticians. I read stuff like this: The average 50-yar-old has saved only $50,000 toward retirement. By age 65 about two-thirds of people have retirement incomes of under $30,000 a year and only 4% have incomes of more than $60,000. That is hardly a picture of a wealthy society. Who comes up with these figures, and are they accurate? Or are we dealing with a figures-don't-lie-but-liars-figure situation? I think it almost impossible to save too much for retirement. You can't be too thin or too rich. If you meet your employer's match on your 401(k) and max out your IRA you should be doing just fine.

  • ricardo - Tuesday, February 20, 2007, 9:54PM ET  Report Abuse

    • Overall: 5/5

    lots of esential parameters are missing to say now or later...

  • Ingrid - Monday, February 19, 2007, 12:46AM ET  Report Abuse

    • Overall: 2/5

    The article raises some interesting points. Basically, we all need to strike a balance between living now and also saving for retirement. This is why it's important to go to school and get the best job you possibly can - so you can have the luxury of enjoying your life now while saving enough to enjoy the same quality of life later on. I agree with many of the other posters regarding savings - continue to save no matter what studies show. There are too many unknown variables for the future of Social Security, taxes and health care costs. It's better to have too much money in retirement than not enough. I do not want to be old and cranky and have to work to support myself. I want to have choices and that is what savings gives you - lots and lots of choices.

  • Tim9435 - Sunday, February 18, 2007, 11:26PM ET  Report Abuse

    • Overall: 2/5

    This article is lacking a few basic elements. One it does not address the longevity issue surrounding retirement and the higher levels of inflation that senior experience due to rapidly inflating healthcare costs. Two, in the article it mentioned that as people are aging spending declines, in our present economy this is not true. People are now spending just as much retired as they were when they were working. Prior to the baby boomer generation retirees went into retirement with their homes paid off, social security in hand and a monthly pension providing their living expenses for the next five to ten years (their life expectency). In todays society retirees are entering retirement with limited social security, large amounts of mortgage and consumer debt, and no pension. For a healthy couple retiring at age 65 the chances of at least one spouse living to age 95 is 25%. Now instead of 10 years of retirement couples realistically need to plan for nearly thrity years of retirement. The sooner one can begin the better, the concept of reducing retirement contributions in order to better ones current quality of living is ridiculous. Most 401k plans match employees for up to 5-6 % of their contributions. Hypothetically let's assume that a working couple making 80,000 per year tucked away 5% which is equivalent to 4,000 per year. Assuming their contributions increase 3% per year, a 12% annual return and a 50 cent employer match their 401k would grow to over four million dollars, over a thirty year period of time. This nest egg would be sufficent to supply at least 80% of current living expenses for retirement and provide inflation and longevity protection through proper planning. Based on the financial position of many retirees in America today they will need at least 80% of their current income in order to sustain their current style of living. For a couple making 60,000 - 80,000 per year, making a small sacrifice of saving between 3,000 to 4,000 per year will not dramatically change their quality of life. The thought of taking those funds to spend on a vacation or to better the quality of life is not only irresponsible but not very practical.

  • Jim - Sunday, February 18, 2007, 9:22PM ET  Report Abuse

    • Overall: 4/5

    This article was very good. Having had a rich life on the way to retirement is just as important as having enough money to fund a nice retirement. Everything in moderation, so lets face it, if you're not rich by the age of 50, what makes you think that you will be any happier just because your bank account has an extra zero, and you have some money.

  • Yahoo! Finance User - Sunday, February 18, 2007, 9:17PM ET  Report Abuse

    • Overall: 3/5

    this is becoming a major problem. the more a certain class of individuals save, the less they spend, results in an unbalanced economy. where are those people who have to work past the retirement age because of the minimum wages. if people saved less than they needed, and spent it, there would be more money to raise the wages and then more people can retire at the appropriate age with just enough money to support themselves and not over do it unlike the other people who save way too much money and have no idea what to do with it! then everyone will be happy and the economy can be closer to balance.

  • Multiverse - Sunday, February 18, 2007, 9:12PM ET  Report Abuse

    • Overall: 1/5

    DISCLOSURE: I’m a lawyer & analyst; NOT a financial planner. I derive NO income from anything having to do with this field. CONCLUSION: The paper's conclusions are INCORRECT & its advice should NOT be followed, either by the described group or younger groups. DO NOT FOLLOW THE ARTICLE OR THE PAPER. SAVE AS MUCH AS POSSIBLE AS YOUNG AS POSSIBLE. If you find you actually have “too much,” you can always save “less” later. Paper fails to take into account, or take advantage of, the exponential time value of money and inability to “catch-up” in later years due to tax laws, to-be-existing spending pressures (to maintain, not increase, lifestyle), and uncertainty. Do not be deceived. The underlying assumptions are self-serving & incorrect; they are limited to a population segment having little in common with other population segments; sample has little in common even with its own population segment; & the results are ABSOLUTELY NOT transferable. The researchers are biased toward preferring people SPEND NOW to keep the economy "going;" they are worried about a potential economic "bust" starting in 2012 (substantial potential shift in working demographics). EXAMPLES of disparity between sample group & almost any other group: existence, type, depth, breadth, & value of pensions; rate of taxes compared to total income today versus when they started in their careers (& impact on lifestyle at various times throughout their lives); differing "tiers" of pensions; population difference between now & past, & resultant competition for resources; diminished political resources available for their age group as they wield less clout to obtain resolution for their problems; difference of resources available when they were in their youth; different social pressures in the family & divorce rates; self-centered willingness of the "researchers" to define acceptability as "subsistence" instead of "enjoyment;" failure to recognize true graph of medical expenses, long term health care expenses, & other factors as a % of income, now & then; difference in how insurance companies pay now compared to how they used to pay & how they are likely to pay in the future; diminution of value of social security at multiple levels; intervening wars & their impacts; population m/f ratios & number of children in various households for different age groups; different types of definitions of "satisfaction" in life for different groups; failure to take into account disparity between cost of money & value of money at any moment & over time (& the change & direction); cost of housing compared to overall income; mere fact of multiple-income families & different types of "social units"; impact of litigation & over-stressing of civil service systems generally; R/E tax laws which cause some retired or elderly people who have paid off their mortgages to still have to sell their homes because their so-called "retirement income value" is not enough to pay escalating R/E taxes due to tremendous increase in value of homes compared to purchase prices; gains tax on those who do sell under those conditions, substantially reducing their equity; stress caused by having to move from homes they may have lived in for 20 or more years; frequency with which people move compared to in the past; frequency with which people change jobs compared to in the past (few "family" companies (as it relates to employees) & little "cradle to grave” employment (no reliance on company as social organization or "quasi-parent"); additional expenses existing today for personal advancement; changes in tax laws limiting ability for social classes to advance not offset by other tax laws which have made advancement more favorable; education expenses for all; increased regulatory environments; substantial change in technology as source of pleasure & as % of income & need for replacement technology; gov’t elimination of self-sufficiency due to population pressures; MANY more. Out of space. Good luck.

  • Yahoo! Finance User - Sunday, February 18, 2007, 8:42PM ET  Report Abuse

    • Overall: 1/5

    Why keep promoting rampant consumerism (the American way)? Whatever happened to leaving a legacy? Articles like this just encourage my age group (21-30) to waste their current income with total disregard to their future financial security. I will be the one supporting these "True Americans" who are struggling to support their over-leveraged financial situation via increased taxes. We all know the social security safety net isn't going to be there when we retire. If we encourage young people to save just enough to survive during retirement, leaving not a penny to the next generation, (or in case of unexpected events for that matter), our economic situation as a country will be in serious peril. How about spinning this article to show the absurdity of the negative savings rate in this country (last year down to -.7%) and to encourage young people to save now? The "live for today, who cares about tomorrow" attitude is already deep-rooted in our culture. Why lend it any credibility? Responses? - adaman_@hotmail.com Savings rate information - http://www.usatoday.com/money/perfi/general/2006-03-01-savings-cover-usat_x.htm

  • Yahoo! Finance User - Sunday, February 18, 2007, 8:20PM ET  Report Abuse

    • Overall: 1/5

    need more info on how to determine, or what to consider, what is the likely amount needed.

  • Yahoo! Finance User - Sunday, February 18, 2007, 8:15PM ET  Report Abuse

    • Overall: 5/5

    Way to go! I agree he is a loser, I with the guy who says lets keep our money because you say goodbye to Social Security! I'm with you my Mexican brother!

  • Becki - Sunday, February 18, 2007, 8:13PM ET  Report Abuse

    • Overall: 4/5

    It seems to be just a matter of opinion when it comes to saving. I'm going to keep up with the 10% saving rule because you just never know.

  • Yahoo! Finance User - Sunday, February 18, 2007, 6:10PM ET  Report Abuse

    • Overall: 3/5

    I agree with the last three commentators (Diane C., Erick H. and the guy from Mexico).

  • Yahoo! Finance User - Sunday, February 18, 2007, 5:59PM ET  Report Abuse

    • Overall: 1/5

    Unbelievably poor advise!

  • Yahoo! Finance User - Sunday, February 18, 2007, 5:39PM ET  Report Abuse

    • Overall: 5/5

    First off those of you thinking illegal alliens do not apport to the system, let me tell you that before I become a resident I worked for 4 years illegally in a restaurant earning minimum wage, paid taxes every year and NEVER earned a return! WE DO PAY TAXES, MORE THAN YOU DO, most of that money is lost supporting poor american people, recovering addicts, people in the streets, etc (what's wrong with that?) Oh, and YES I am from MEXICO. Secondly I believe the study is right, old people keeps going to work because work is fullfilling I work with millionaires, they don't need the job, they just do it because they like it, I earn 120dlls a day, half of the people in my group are over 50 and none of them needs to work, they have expensive houses and enough money, they are actually retired from their livejobs. the rest of us are struggling to have enough money to pay RENT, CAR and FOOD and saving very little to some day be able to give the down payment for a SMALL HOUSE. I live in LA (yes cliche). Thank you for reading. PS to the black people out there, we're brothers and sisters different color skin, same suffering, let's support and love each other, let's fight together.

  • erick - Sunday, February 18, 2007, 5:39PM ET  Report Abuse

    • Overall: 1/5

    the government just wants us to spend more money now to boost the economy, f*** them! i want to retire with as much money as possible. we all know that social security will be gone by then anyways. so the hell with the idiot who wrote this article! LOSER

  • Diane - Sunday, February 18, 2007, 5:38PM ET  Report Abuse

    • Overall: 4/5

    Thanks for the article. It looks like saving 10% for a rainy day or retirement still makes sense. The people who volunteer to be in research studies are probably more educated and financially literate then the general population. 80% of the general public is not saving for retirement even if a s tudy of 6,000 infers so.

  • Nick - Sunday, February 18, 2007, 5:27PM ET  Report Abuse

    • Overall: 4/5

    It's good to know someone else is saving 10 to 15 percent of their income in anticipation of retirement. However, this does make me think that skipping one year, or a half a year, of retirement saving in favor of a nice trip with the wife and kids would have immediate benefits. Tomorrow is never promised, so we should all enjoy today as well as plan for tomorrow.

  • Yahoo! Finance User - Sunday, February 18, 2007, 5:25PM ET  Report Abuse

    • Overall: 5/5

    I read several of the commments and wondered if those that scored this artilcal low read the same artical as I did. I have read all of Ms Rawley's articals for the last 2 years. Believe me, she advocates saving and I believe the artical conveys that value. I save, over 50% of my gross goes to savings. Have no debt and no mortage amd our income is under 100K. Live in an upscale neighborhood (house is worth about 400k) and both cars 2004 and 2005 are paid for. We travel and buy quality when we buy. The key is how and when you spend; and where you save your money.

  • Jeff - Sunday, February 18, 2007, 5:19PM ET  Report Abuse

    • Overall: 1/5

    This poor woman will be eating at Denny's and not tipping for a night out on her "retirement" income!

  • James - Sunday, February 18, 2007, 5:16PM ET  Report Abuse

    • Overall: 5/5

    We need to examine the statement of American's "zero savings rate." This piece is a step in that direction. First, the savings rate doesn't consider investments in real estate or stocks - the backbone of 401k plans. Secondly, the financial services industry overstates the nestegg needed to retire because they want to err on the safe side. Fidelity's retirement nest egg calcs are grossly exaggerated on the conservative - high - side. Good to read more of the contrarian position on this issue, especially from the highly credible Larry Kotlikoff.

  • Geoffrey - Sunday, February 18, 2007, 5:08PM ET  Report Abuse

    • Overall: 1/5

    This article addresses some of the lowest income households. Being a financial coach, I find it misleading for many people who may decide to save less for their own retirement. My clients do not often experience a drop in their cost of living at retirement. People do not become old and conservative at retirement. Many are using their increase in available time to travel more extensively, explore new interests, create businesses, or in other ways enjoy their second childhood. I coach people to create the ability to enjoy long, healthy, and enjoyable lives. Doing so requires the accumulation of a sizable nest egg and requires saving for it.

  • SCUFFL - Sunday, February 18, 2007, 4:56PM ET  Report Abuse

    • Overall: 5/5

    It amazes me what people write just to get exposure. I hope people beleive this so that I have plenty of 75 year old 'economists' to work for me. The 'Rules of Dumb'? - 'you squander your youth rather than your money', that's a real problem in this country!. Oh I get it, Low income people with 4.6 kids are saving too much because when they're old, their kids are gone and social security will replace most of the income. Brilliant! Honestly, Laura should be embarrassed about putting away 10 to 15% of her income annually and only being able to replace 80% of her current income in retirement. I agree with her suspicion that she is one of the dupes. Well done Yahoo!

  • Yahoo! Finance User - Sunday, February 18, 2007, 4:54PM ET  Report Abuse

    • Overall: 5/5

    Finally an article that gets at the facts, not the fiction created by investment firms. I retired 5 years ago at age 52 with what i deemed adequate funds. No money manager in the world would have agreed with my decision because they are so cautious. Meanwhile I've had the 5 best years of my life and have far more money today than I started with 5 years ago. And meanwhile, my cautious friends who have similar resources continue to work because they think they need to due to very bad advice in the press daily.

Showing comments 6-35 of 271<< PreviousNext >>
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