Throw Away the Retirement Calculator

Talk about having a bad day. I just plugged numbers I’ve compiled about the average income and savings of Americans nearing retirement into one of those online retirement calculators. It suggested, among other encouraging ideas, that I increase the rate of return on my investments to around 30% and delay retirement until I’m 108!!

This would be funny except it reveals an unpleasant truth about the plight facing millions of Baby Boomers. A study from the National Institute on Retirement Security states the median retirement account balance for near-retirement households is a meager $12,000.

And while SSA warns that Social Security should not be expected to provide more than 40% of retirement income, a survey conducted by Nationwide Retirement Institute indicates more than half of the respondents said Social Security benefits will be their main source of income in retirement.

The disconnect between expectations and reality regarding the Baby Boomers and retirement is profoundly disturbing. It’s as if an entire generation is cheerily careening towards a cliff while belting out “Living on a Prayer.”

Remember the Big Deal of the Day on Let’s Make a Deal? Like the final contestants, everyone nearing retirement must choose from their own three doors.

Door #1 Resign yourself to being broke and miserable. ZONK!!

Door #2 Work WAY longer than you expected and drastically cut back your current lifestyle so you can save like crazy. Not exactly a ZONK, but you very well may be too old, tired, and sick to enjoy the few years you have left.

Door #3 Think of something else–something creative–something outside the box.

We faced those same doors when we found ourselves swallowed up by the Economic Crisis of 2008. After working hard our entire adult lives the first two were simply unthinkable. Our Door #3 was finding a lower cost of living by moving abroad. In doing so not only were our financial problems solved but we’ve created an exceptional lifestyle funded by our Social Security benefits.

If you’re over 50 and aren’t well on your way to fully funding your “golden years” you might as well throw away the retirement calculator because you’ve basically run out of time. Even if you drastically cut your current budget and muster up the self-discipline to toe the line for the next 20+ years, let’s be honest, who really wants to do that?

Shift your focus to finding your own Door #3. Your investments aren’t magically going to start earning 30% and you’re not going to make it to 108. Whether it’s considering a move overseas or whatever other strategy you settle on, get busy right now taking decisive action to rescue your retirement.

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