The Magic Numbers of Retirement Planning

Use these guideposts to help you prepare for retirement

March 28, 2011 RSS Feed Print

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3 years. It took three years for the average 401(k) balance to climb back to the amount it held in 2007. The average Fidelity 401(k) held $69,200 in 2007, before it plunged to $50,200 in 2008, due to market declines. It took until 2010 for continued saving and the stock market rebound to push 401(k) balances above their 2007 peaks. The average Fidelity 401(k) account balance was $71,500 at the end of 2010.

[See 401(k) Mistakes Job Hoppers Make.]

83.5. A male born in 1946 can expect to live 17.5 more years, until age 83.5. Once he makes it to 70, his life expectancy increases to 84.7, according to Social Security Administration data. A woman of the same age currently has a life expectancy of 85.7 years. For the earliest female baby boomers retiring this year, that's an average of nearly 20 years of retirement that must be financed. Many financial advisers recommend planning for at least a 30-year retirement if you are in good health, in case you live longer than expected. "Remember, that's just the average, and that's not really including medical advances, so we plan on at least age 91 for our clients at retirement, and 96 or 101 for younger clients," says Rick Brooks, a certified financial planner and vice president of Blankinship & Foster in Solana Beach, Calif. "It's better to plan on living too long and die with money left over, than to plan on living the average and come up short on resources."

Twitter: @aiming2retire

Tags:: retirement,; money

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This is not impossible, folks. Single parent, raised two kids. Back to school later in life for a GED, then a two yr degree in health care field, graduated at age 40. Worked long night shifts. Lived a modest lifestyle, saved, saved, saved. Avoided debt like the plague. Before I made a major purchase I imagined what it was going to look like in the dumpster in a few years. If you want to tread water live within your means, it you actually want to get somewhere live below them. Found a good fee-for-service financial planner. No, they aren't cheap but I knew I couldn't afford to be without one. Find someone who caters to ordinary working people. 62 now, have the means for a comfortable, not lavish, retirement. I did it, my two sisters did it even better. Don't be so discouraged. If I did it, you can do it.

Mary of FL 2:30PM April 20, 2011

I am 55 and put in 10% of income but with 3 kids in college, cost of living etc etc all I have saved up is about 150k. Everything says I should have like $500k at least for retirement. There is no way to get from here to there in 10 years. Of course I will try and keep working until 70, save more etc...but there is no way I will be able to save 350k in 10 years...I think a lot of people are in same boat, I am at a loss as to what more to do, other than just do what I can and hope for the best....

dan of OR 4:51PM April 15, 2011