The twist is this: The bad news is only a fraction of the people will be able to save $4.3 million for retirement because the average salary is too low. The good news is most people wonât need to save $4.3 million because, thanks to living on a low average salary, they are accustomed to spending far less.
Investors
It might suit 401k plan sponsors and fiduciaries to tell this story of the generations to help the next generation avoid the mistakes of past generations. This tale provides many good tips about the dangers of investing in extremes, be they too conservative or too aggressive.
While retirees and near-retirees may be considering starting a small side business, many donât have any entrepreneurial experience. How might they find answers to the questions they have?
If youâre over fifty, that gold watch gleams closer and closer. You start thinking. You start wondering. You start asking questions.
To address this requires employers to do more than having a periodic âemployee educationâ meeting. While these can help (see the previous article), more need to be done. Plan sponsors need to consider how they (and, more importantly, their service providers) deliver messages to plan participants.
Not only does the typical plan sponsor not have investing in employee education as a high priority, but they also likely donât have the wherewithal to monitor the consistency of how the provider runs the education program.
Retirees should think for themselves and what alternatives they have regarding their retirement assets. These arenât the same as they were when they were working.
Those who work with retirees and people saving for retirement often have the best perspective when it comes to guidance pertaining to what is comfortable and what is not. It begins with a very simple definition.
This doesnât mean you shoot haphazardly for the stars when you can have the moon. After all, youâve got to know your limitations. Seeking unreachable goals will only make your retirement seem hollow and pointless.