‘To a man with a hammer, everything looks like a nail.’ – Abraham Maslow

Seventy Years Old, Ready, Go

My wife and I retired with less than $50,000 in savings and over $100,000 in mortgage debt, nowhere near the one million dollars the financial media prescribed. Was the gap between what we had and what we were told we needed reason for alarm?

Fear is only useful in situations that require fight or flight. Financial uncertainty does not suit these situations. You are better served staying in your rational mind. I rationally read books and searched the internet for answers.

On line “advice” prescribes, a. starting earlier (your time machine is at the cleaners) or b. postponing retirement and working longer to fill the gap. But, if you didn’t save $1 million in 40 years working, how were you going to save it with ten more years of working? The advisors seem to lack a grasp on reality. (Hammer and Nail analogy)

My research also showed me

• Only 3.2% of American retirees have $1 million or more in their retirement accounts
• Average retirement savings for those between 21 and 74 is $609,000, median (middle value) is $200,000, a far cry from the recommended one million dollars.
• The 401(k) according to Ted Benna, its creator, was not designed to replace company pensions. It was designed to supplement them. No wonder many of us are falling short.

‘How did $1,000,000 become the retirement savings target?’

In the 1980s, many companies shifted from pensions to setting up employee funded savings plans. Many were set up as 401(k)’s. Financial services companies commonly prescribed the $1 million savings target. The financial news media broadcasted it, making it the “loudest truth.” It persists today. No sense becoming angry or blaming those pointing you in the wrong direction. Fixing the blame does not fix the problem, it only blinds you to the true solution. You are fixing the problem.

What’s Next?

Consumerism. What is it; and what did it do to your savings?