I’m at the stage in my career where I’m willing to contemplate the fact that retirement is on the horizon—probably in the next 10 years or so.
Increasingly, I find myself talking about “retirement readiness” with friends and colleagues who are in the same situation. Recently, I had a chance to discuss retirement with a group of Vanguard clients. I found their comments to be quite telling, and pretty much in line with what I’ve already heard from others. Read more »
A recent article in the Wall Street Journal tells a sad tale of retirement preparedness: The typical pre-retiree baby boomer has less than one-quarter of what he or she needs in a 401(k) plan to retire.
In my view, this assessment is entirely too bleak. As I’ve noted previously, estimating retirement readiness for an entire generation is a difficult task, and the result is sensitive to the assumptions used. Moreover, the issue isn’t a black-and-white question—who’s ready, who isn’t?—but one of degree.
In my January 25 post, I looked at two tactical retirement issues: improving savings rates and evaluating portfolio risk levels. In this post, I’ll wrap up with three additional ideas.
In my January 5 post, I wrote about big developments shaping retirement in 2011. In this and an upcoming post, we’ll look at simple retirement planning tactics individual investors may want to consider.
1. Savings rates. There’s a widespread myth that you can somehow reach a secure retirement by tinkering with your portfolio. Portfolio management is important, of course, but it’s priority number 2 or 3. Above all, the key to financial security in retirement is adequate savings.
Here are several “big picture” retirement themes I expect to hear more of in the coming year. I’ll come back later in the month with a post on personal retirement tactics.
