The other day, I was preparing to record a podcast for Vanguard.com on life events and asset allocation. I decided to veer away from the predictable “retirement is a life event” theme and concentrate on marriage, children, and divorce as life events that should stimulate some serious consideration of your asset allocation.
Then I happened upon this Wall Street Journal article, which made me pause.
Ask a Vanguard investor about what it takes to be successful at saving for retirement, and he or she would probably tell you to start saving early, save as much as you can, invest in a low-cost diversified portfolio, and stick with your plan through thick and thin.
What’s the typical income of a U.S. retiree? $40,000? $50,000? Higher, lower?
It’s $31,157 as of 2008.
That’s the median income of households age 65 and older as reported by Pat Purcell of the Congressional Research Service. The median means that half of older households had a higher income, half lower. Technically, it’s not the income of “retirees,” because it includes the income of older households whether they are fully retired or still working. Still, it’s a good metric of the income of retired Americans.
In June 1997, Chicago Tribune writer Mary Schmich penned a now-famous column titled “Advice, like youth, probably just wasted on the young.” In short, the column served as the speech that Ms. Schmich would give if she were asked to make a commencement address. The following year, the column went viral, if you will, in the form of the music single “Everybody’s Free (To Wear Sunscreen).”
I recently attended a conference in Washington on the question of retirement income—how baby boomers will generate income from their 401(k) accounts once they retire. Read more »
