The Grinch Stealing Your Retirement Security ??

LAGUNA NIGUEL, Calif. - Dec. 14, 2016 - PRLog -- While this may be to some the most wonderful time of the year, for many it is anything but. There are thousands, if not tens of thousands, of retirees who are wondering where their next meal is coming from and not what toys they will be buying for their grandchildren.  Their dreams of golden years have turned into nightmares about how to survive the onslaught of winter.  These unfortunates among us are paying for their past profligate ways.  They lived for the moment and ignored their future.  They made a series of ill-advised financial decisions over their lifetime.  Instead of saving for a rainy day or their retirement, they maxed out their credit cards to satisfy some "necessity".  The proof of the pudding is a June 2015 analysis by the Government Accountability Office that found that the average American between the ages of 55 and 64 had accrued about $104,00 in retirement savings.

At first glance, $104,000 might seem to be a lot of money.  If one willingly wanted to accept living at the poverty level, one would need $11,880 according to the 2016 Federal Poverty Guidelines.  This means that such an individual would have enough money to live on for 8.8 years.  However, someone who had amassed over $100,000 in retirement savings surely would not have been able to save this amount had he/she been at the poverty level during his/her working years.

The average person between the ages of 55 and 64 earned $86,986 according to government statistics.  This means that upon retirement a person wanted to maintain his/her pre-retirement living standards would have enough money upon which to live for approximately 1.25 years.  Living on half of one's pre-retirement would support 2.5 years.  Many financial advisors believe that in order to not outlive one's money one should not spend more than 4 percent of their retirement savings per year. This means that in order to maintain a lifestyle based on 50 percent of one's pre-retirement income one should have $1,087,325 in retirement savings These calculations do not support a happy holiday scenario.  Ignoring them will definitely ensure that not all your holiday wishes will come true in the future.  Unless one knows his/her life expectancy with certainty, clearly one should either save more, work past the normal retirement age, or both.

Rather than counting on being able to work for an eternity, the prudent decision would be to start saving more.  This means starting earlier in life and allocating more of one's income into retirement savings.  Substituting a $1.85 tall brewed coffee for the morning $3.65 tall cinnamon dolce latte at Starbucks can save $1.80 a day, $9.00 a week, $450 per year, and $18,000 over 40 years of working.   While this alone will not get one to retirement nirvana, it is meant to illustrate that some small adjustments in one's spending habits can produce meaningful increase in the amount of money to support one's self in retirement.

When making your new year's resolution in addition to losing weight, exercising more, etc. add saving more for retirement.  If there is one resolution not to break it is to secure your financial future. Ignore this suggestion at the peril of a bleak retirement.

Actions that one can take to improve his/her retirement outlook can be found in "A Common Sense Roadmap to Uncommon Wealth" and "Common Sense Prescriptions for Financial Health" by Marvin Doniger.

About the Author

Marvin H. Doniger has been an avid investor since his early teens. During the course of his lifetime he has developed a philosophy that has served him in his own professional development and in the creation of an investment portfolio for his family's financial needs. His perspectives have been developed from his lifelong study of investing, his actual experiences as a registered representative, an individual investor, as well as from working for large companies in industry and as a management consultant to Fortune 500 companies. He is listed in the International Experts Directory.

Another one of his books is A Common Sense Approach to Successful Investing, in which he first introduced stratamentical analysis, a unique approach for identifying long-term investment opportunities He has been interviewed by numerous outlets and his articles have been published in media outlets such as Investor's Digest of Canada and Morningstar.

Mr. Doniger received a Master of Business Administration from Columbia University Graduate School of Business and a Bachelor of Science Degree in Mechanical Engineering from Tufts University. He has taught undergraduate and graduate level courses in production control, inventory management, information technology and finance at Fitchburg State College and Webster University. He currently resides with his wife, Marsha, in Laguna, California