Has the prospect of retirement taken on a sudden, terrifying urgency? Here are the financial planning moves you need to start making now.
https://www.nytimes.com/2018/07/06/business/retirement-five-year-plan.html
H’s employer, the Fed govt has always had checklists for folks from 5+ years to retirement and then closer and closer. We looked them over but didn’t change any of our plans.
The best advice in there was the first step - figure out what you have. Second best was to figure out your post-retirement income and start living on that.
Yes agree. I cut back on my hours to the point of income that should emulate our retirement survival income. It’s tough, but we still have real estate rentals we will liquidate that aren’t factored so I “think” we’ll be OK. But it’s a darn scary thing. I’m the oldest…and will be the last to retire of my siblings. I like working so it’s not a hardship from the “work” aspect.
NY Times and the Wall Street Journal always start with such comfortable assumptions:
"Let’s say you are a single 60-year-old earning $140,000 a year. You have $1.5 million in your 401(k) and will contribute 6 percent of your salary to it, or $8,400, a year, along with a 3 percent match from your employer until your planned retirement at 65. You will get roughly $500 a month from the pension plan that your company phased out several years ago but that you are still eligible to collect from, and can receive $3,150 a month from Social Security if you wait until you are 67 before you start taking it. "
https://www.census.gov/content/dam/Census/library/publications/2017/acs/acsbr16-02.pdf shows that the median household income for age 45-64 was $69,822 in 2016.
https://www.census.gov/data/tables/2013/demo/wealth/wealth-asset-ownership.html links to a spreadsheet that shows the median net worth by age and other characteristics in 2013.
For single householders age 55-64, males had a median net worth of $58,840 ($15,130 excluding home equity) and females had a median net worth of $59,975 ($13,068 excluding home equity). Married couples of that age had a median net worth of $289,623 ($153,625 excluding home equity).
So, yes, the assumption in the article is that the single 60-year-old has about double the income and about one hundred times the non-home-equity net worth of the median person in that situation.
Who in the world is this 60-year-old woman making $140,000 a year (even those of us who made that at some point have gone to a lower salary now), $1.5 million (!) in her 401k alone. A company that matches her 401k? AND she’s going to get a pension. AND she owns a half-million dollar house?
Gawds, I stopped after the 4th paragraph.
It’s a small pension. 
If you are in this rosy situation, you will survive.
The advice needed is for those who are not in such a rosy situation…
And – a small pension is better than no pension at all! Which is the situation for many!!
http://www.people-press.org/2012/09/27/section-4-demographics-and-political-views-of-news-audiences/ suggests that (in 2012) readers of the New York Times and Wall Street Journal skewed higher than typical on the income scale, but not so much that their readers’ median income level was likely to be anywhere near $140,000 even for older ones (then or now).
@SouthernHope She has $1.5 mill because she never had kids.
So she never got to complain about the “college financial aid donut hole”? 
A single person earning $140,000 per year isn’t limited to a 6% contribution to her 401k. She could have been plowing in $18000 until she was 50 and then $24000.
I agree that they could have found someone more average to profile. Even for WSJ subscribers.
@intparent , you may be on to something (#10.)
Dh has a former colleague who hates his boss, hates how his job has been recently redefined and believes he won’t live beyond 70. While whining to dh about wanting to retire early, he complained that he missed being included in the company’s old pension plan by just a couple of years so he can’t imagine retiring any time soon even though he has over $5 million in retirement savings/investments.
Dh asked me how I thought this guy had accumulated so much despite frequent vacations and a pretty lavish lifestyle. I pointed out that he’s single, has no children and no other dependents.
You aren’t going to get to 1.5 million in your 401K by only contributing 6%, or $8400 a year. That’s unrealistic.
@busdriver11 I disagree. If you start your career at $48,000 a year with raises of 2% a year and put in 6% and get a company match of 3% with an 8% rate of return for 40 years, that gets you to 1.4 million dollars. So it is definitely possible because of the 8th wonder of the world (compound interest). I am on pace to beat that number and have averaged putting in much less than 8,400 a year because of a slightly better company match and a better rate of return than 8% over the course of my career. Things can always change with the markets, but 1.5 million with a long time horizon is not unrealistic for a consistent, aggressive (95% equities) saver who has a little luck (Career started right after 1999-2000 tech crash).
Company match of 3% and steady 8% return = utopian numbers for the majority.
How many people start at age 20, consistently funding their 401K, for 40 years, consistently getting the same company match, getting an 8% return average for all of 40 years?
Not many, I suspect. Unrealistic for most.
If you are making 50k a year and have no savings, no pension, no house, then there is no good advice NYT can give you. If you have 5 million in liquid assets, you should be fine no matter what.
The scenario they used was close enough and relevant enough to be interesting for me …
I always wonder if articles such as this are paid for in some way by financial planners. The scenario they described, accomplished making me anxious and therefore I felt a need to find a financial planner. I will be fine in retirement as long as DH and I follow our plan of working, probably not full time, but enough to pay bills, until we are 70. But, I do have the issue of what we should do about long term care insurance.