“The 401k generation is beginning to retire, and it isn’t a pretty sight.”
That’s the conclusion of a recent Wall Street Journal study.1 But the most shocking revelation is just how big the gap is between how much retirement income people will need to maintain their standard of living… and how much they’ve actually saved:
Many have less than one-quarter of what they’ll need
And how are they dealing with this challenge?
Facing shortfalls, many are postponing retirement, moving to cheaper housing, buying less-expensive food, cutting back on travel, taking bigger risks with their investments and making other sacrifices they never imagined.” 1
Like Carol Dailey, who is continuing to work at age 71 because her 401(k) took a hit in the 2008 market crash. She also cut back spending for entertainment and food, and is substituting boxed wine for the ones she used to enjoy from her favorite vineyards.
Her financial representatives is planning to help her be able to retire by shifting her assets into riskier investments that can “return 10% a year.”
Hmmm… I wonder if that’s the same financial representatives who advised her on where to invest her money prior to the 2008 market plunge?
If people could take more risk, and do it successfully, why haven’t they been doing that all along?
Isn’t that the classic definition of insanity?
How much more evidence do we need to know that 401(k)’s and “doing all the right things we were told to do financially” aren’t working?
[Read more…] “Retiring Boomers’ Savings Fall Far Short”