Writing for Reuters in a November 28, 2018 article titled Money disasters can derail retirement, Gail Marks Jarvis talks about Karyn Golden whose annual income was close to $200,000, 20 years ago. Now, at age 70, she is down to her last $200 in savings. She is among the 67 percent of Americans who wish they would have saved more, earlier in life. How much more? What does “earlier in life” mean?
The table below answers these questions. It shows what we need in order to maintain our career lifestyle in retirement.
|Age at the start||% of income needed to save|
|20s||10 – 15%|
|30s||15 – 25%|
|40s||25 – 40%|
|50s||40% or more!|
But even if we do the right thing we could still face poverty in retirement. Many have experienced it. Money setbacks could decimate our savings. Examples:
- Unexpected medical expenses – the leading cause of personal bankruptcy in the US
- Major property damage caused by natural disasters
- Market collapse such as Monday, October 19, 1987, or 2008/9
- Unexpected individual stocks falling out of bed, e.g. WorldCom, Enron, Nortel, Penn Central and more
Such setbacks are more common than most people assume according to the Rand Center for the Study of Aging. Monday Morning Millionaire Program members are prepared to deal with these matters.