Monday, October 5, 2009


Okay, the more I research retirement savings the more ridiculous it gets. My favorite is this article on Motley Fool. Check out this handy chart the author has prepared to tell us how much we're supposed to be saving:

our Age Percentage of Income to Save
20s 10%-15%
30s 15%-20%
40s 20%-30%
50s 30%-40%
60s 40%-50%
70s 50%-60%
80s Lotto!?

Okay, 10-15% I can see. What 40 year old can save 20-30% of their salary? The author doesn't say, but I assume she means gross salary. Still, most people at that age are raising a family. Their expenses are at their peak. If they started early, they have children in college. This chart is a joke.

There's another article from AP today about how those close to retirement are so off track due to the market crash. This one has yet another metric for retirement savings:

The bottom line is that men will need to have 4 to 6.8 times their annual salary in the bank, separate from Social Security. Women should aim to have 4.5 to 7.5 because they tend to live longer, according to the study.

Overall, I fear these articles just serve to discourage most Americans who have very little in savings without giving any realistic advice about how to save for what we all know will most likely be the biggest expense any of us have.

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