How to Tell if You Are Saving Enough for Retirement

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The article from K of AZ was one whom I could really relate to in my lifetime.
I have always, paid for, enabled, worked two jobs just to help out family or
be able to take vacations at times.
Now older and almost to retirement age, I find myself without much debt,
yet not enough to be able to retire..
Since we do not know what the future holds for us, I now am trying to
save as much as possible while still working.
I do plan to work as long as possible as I enjoy working and have
no spouse to keep me from doing so..As long as my health holds
out, I will keep working these days.
I suppose I should have planned better, been more cold hearted
in choices to help those who could have done better to help themselves.
But, having a big heart doesn't help with your retirement..

Kim of FL 10:33AM September 28, 2010

My husband and I have no savings. He is 58 and I am 52. He has a retirement plan at work for 23 so far years at work. By the time we retire our morgage, car, and loans will be paided for. So... what should we do? Right now money is tight and we cannot save much.

Lynn of KY 10:56AM September 16, 2010

My answer: never enough, unless you stand to inherit a bundle. No matter how much you save, another market crash is going to come along and burst your bubble, wiping out 35%+ of all the hard earned money you have saved. Another MAJOR repair will be needed on that little house you have lived in since early marriage (in order to pay off the mortgage & save that money). Another careless driver is going to crash into that car that you love and just recently paid off, requiring another loan or substantial withdrawl to purchase another one (one that you like less, at that). Another medical diagnosis will be made that requires outragious co-pays for supplies and drugs (even with decent health care coverage and a drug plan). My wife thinks we should just stash our savings in canning jars and bury them in the yard (interest income on buried savings is about the same as you'd get by putting your money in a CD acct today anyway). Do I sound cynical? Even by contributing the max amount into IRAs just about every year since their inception (although there have been a few years when we weren't able), and by us working two jobs when we could have lived on one(although there have been several unfortunate periods of unemployment), and by saving at least 10% of our gross income religiously, and by trying to invest wisely, and by pinching pennies all our lives, I know we are better prepared than some, but we have gotten knocked back SO MANY times, we doubt that we will ever have enough to retire at 62 as we have always dreamed. At the current ages of 57 & 58 and after the last market crash, we probably should bury our retirement dreams in the yard along with the money.

Jay of PA 8:49AM May 10, 2010

Although I earned very little in my 20s and 30s because the jobs I got were based on my obtaining a "worthless" college degree (in journalism, which pays very little unless you're lucky enough to be one of a rare few), at my first job out of college, I managed to save quite a bit because I "lived" in a broken down hovel with low rent and worked for a supervisor who wanted to justify hiring more reporters by working me almost non-stop, resulting in my being paid for a countless number of overtime hours. I didn't realize then what a phenomenal boss that man was (he was also a really great human being) and how lucky I was to be working for him.
I saved enough to put a substantial amount down on a house that I paid off quite a few years ago, and I have no debt, primarily because everything I own is from the 80s, if not older.
The mistakes I made with my money include the following, which I would advise anyone against doing:
1. treating love as a commodity onto which a monetary value is and/or can be assigned (so that how much money one spends on another person or on more things than one truly wants becomes a contest or competition that, in the end, no one actually "wins");
2. financially supporting, for months and months on end, a healthy adult (not a family member) capable of working without first establishing "ground rules", including deadlines;
3. not learning more about the investments into which money is placed by a "financial planner";
4. spending ("wasting") additional money on education after having spent too much on an already worthless degree/certification;
5. spending ("wasting") money on furniture, clothing, jewelry, cars, etc., that are not necessary;
6. not obtaining private long-term disability insurance;
7. believing that you will be "the one" who stays healthy, who will always have/find a great job, who will never be ill or involved in a severe auto accident.
There are more, but that's all I can think of now.
I advise not to regret spending money on:
1. obtaining a specialized type of medical treatment for yourself and/or loved ones at an out of state facility;
2. a beloved pet, including life-saving procedures if more than two veterinarians believe the pet's life can be saved.

K. of AZ 12:56AM May 04, 2010

1. Guilty of the following: The more I earned, the less I saved, the less I earned, the more I saved-like right now.
2. More than Blessed: Receive one full pension from the Army (Enlisted Pay),receive 1/2 pension from State Job (lower end of pay scale), earn minimun wage of part-time work, working with military, and volunteer the other part-time hours.
3. Did the unthkinkable against all advise: Receive Social Security at Junior Senior Citizen rate; and bank it for when benefits may be reduced or Social Security is done away with completely.
4. Save 15% of "net amount" from pensions and pay, which is seperate from the social security money I receive. I never lived on gross income because I think that is totally unreasonable.
5. Will be going to computer school to learn the things I don't know, got away with not having to know so that I will know when the time comes when I won't be working where I am now, and will be qualified and up-to-date for the real world, with the hope and prayer that someone will actually hire someone who will be 65 years young by then.
6. Although not happy with low interest rates for savers, I figure my social security checks sort of take care of that.
7. Paid off all my debts when I retired the first time back in 1996, bought a new car in 2005 with 1/2 in cash and 1/2 on credit; and paid that off in 2006.
8. Am blessed to have medical coverage through Tricare and some from VA.
9. My highest annual earnings was at $36,000, and my lowest now is similar to what it was back in the early 1970's.
10. Stocks, Mutual Funds was something I tried, which was ok. for awhile; and, then not ok at all during 1998 time frame, and stuck with what everyone says not to do, which was Annuities, traditional IRA, CD's, money markets, and jars all over the place for change.
11. Do I have enough saved for a real retirement time? Who knows? Until that question is answered, I'll remain in the game of life; and, that's the best and only advise I can offer anyone for retirement.

Barbara Goldin of TX 7:18PM May 03, 2010

Your retirement expenses are best estimate from your pre-retirement expenses by eliminating all work related expenses, determine your expected retirement activities expenses such as travel or hobbies, inclube any debts (hope your own your own home), investigate ways and means to reduce retirement health expenses such as best use of medicare benefits and estimate your health expenses (May be 7.5% of income) and expect your children or grandchildren will need financial help. There are 3 phases of retirement depending on your health such as (1) first 10 - 15 activity years, (2) next 5 years of less activity and health expense may increase and (3) rest of your expected lifetime - Home living / greater health expenses. For more comphrehensive retirement plan development and investment strategies see website lifetimestrategies2009.com.

VERN A. of CA 11:11AM March 03, 2010

Interesting article and interesting comments. I totally agree with the comments about the author underestimating what people realistically need to save for retirement. In spite of the markets ups and downs which I've not been immune to, I simply have chosen to live within my means, save 20% of my gross pay since I got out of college and NEVER pay interest to some NY bank on my credit cards and voila...... I am 55 years old and have more than enough money to retire early and debt free. It's not rocket science. Just live within your means and you can do it.

saabguy328 of IN 12:36PM February 28, 2010

Right on , brother. The track record suggests that those who have not saved a dime will rely on government to rescue them...and that means you and me.

Dixidude of VA 3:39PM February 27, 2010

Whenever I see a comment in articles like this saying individuals should save 10% of income for retirement the rest of the article immediately takes a credibility hit. This oft mis-quoted percentage is way below what people need to save for the future. Typically, its lifted from similar previous articles (with much else) to create another "how to retire" with little effort or research involved.
If you believe these sorts of articles then you believe that the past will be the same as the future for Americans Unfortunately it will not. A combination of factors from our services-based economy, industrialization in the rest of the world, poor government economic policies over the past couple decades, and a culture of consumerism is writing on the wall for a much poorer retirement to those who are not saving as much as they can, while they can.
Start saving at least 30%...more if possible...and hope our country survives the economic and political problems it faces.

Mike A of NY 9:31AM February 27, 2010

Even those of us who have done these things still don't REALLY know what we'll need. I started working at the age of 13 and have been saving for retirement since I was 22. But still...
Will Congress (finally??) fix social security? How? Means tests? Older age for full retirement? A "new and improved" COLA formula? Higher taxes on payments? I've watched for YEARS as they have dithered and played politics while avoiding making 'hard' decisions -- though the decision gets harder every year they delay.
Medicare funding is a perfect example. Yet another (annual) crisis this weekend -- just like every other year. So how much can retirees REALLY count on it? And how much will they have to pay our of pocket for care?
Then, with our private retirement savings and pensions, will Congress (in it's "crisis" funding mode) decide that those of us who have saved our entire lives now need to 'share' with those who never saved a dime? Excise tax on retired income over some some socialist-derived "acceptable" amount?
Your example of 25% tax rate is probably laughably low. The libs in this country want us to be "more like Europe." And their tax rates are more like 45-55%.
So how does one plan for how much we'll need in retirement? Pressures, already huge, are building and the tectonic plates under us are shifting. It's part of the angst that has the economic 'recovery' feeling almost stillborn. LOTS of uncertainty. Our "leaders" can't lead. And our "representatives" are spineless partisan hacks.

Waldo of RI 7:07AM February 27, 2010