Fix Your Retirement Sooner, Not Later

by Marc Bastow | November 30, 2012 1:13 pm

We all know what we want in retirement, but disturbing research shows many of us aren’t on the road to achieving it.

MSN Money‘s Marilyn Lewis provides some fairly startling news on retirement[1]: According to research conducted at The New School of Social Research in New York, “slightly more than half of middle- and lower-income Americans will be living at the poverty line in old age.”

So says retirement security expert Teresa Ghilarducci, who collected data on Americans ages 44-55 — which comes to around 39 million people. According to Ghilarducci:

“We have a 49% chance of being poor at 65, which means the risk goes way up when we are 70, 75 or 80.”

Consequently, the title of the article is “Retirement Planning if You’re Broke.” Sure grabbed my attention.

Lewis goes on to offer advice for people on the brink, such as considering bankruptcy or downsizing. Frankly, bankruptcy is a last-ditch resort, and I honestly wish the best for you if you’ve reached this place — but if you have, Lewis’ advice is sound.

That said, this also should serve as a lesson to those in a better financial situation with a bit more time to go:

“It’s never too soon to start.”

You can’t avoid retirement problems altogether. Shit happens. But what you can do is be as prepared as possible, which in turn can give you the time you need to overcome hurdles down the road. So start planning early.

InvestorPlace Editor Jeff Reeves has written a number of articles on the importance of starting early, including this one[2] where he begs people in their 20s and 30s to not invest like their in-their-50s parents.

You don’t really need much to get started, either. Many jobs offer at least 401k accounts — and some even offer employee matches (otherwise known as “free money,” so take it). And even if your job doesn’t have a 401k program, you can get started investing in the market with a basic IRA account.

The biggest concern most of us hear when talking about retirement with “younger” people is they don’t have enough money to invest. But believe it or not, you can begin investing (be it investing in stocks, or investing in yourself) with as little as $1,000[3].

Heck, if you just save a dollar a day in a Roth IRA, you eventually can buy … well, enough beer to fill a 2 million-gallon jug[4].

OK. While that last one’s a little bit of levity to brighten an otherwise very serious topic, the point is that the societal cost of 39 million people headed for poverty is incalculable — not to mention, actually being one of those 39 million is … well, not where you want to be.

If you’re not yet at desperation’s door, but you haven’t begun planning for the future, the time is now.

Marc Bastow is an Assistant Editor at

  1. fairly startling news on retirement:
  2. including this one:
  3. with as little as $1,000:
  4. enough beer to fill a 2 million-gallon jug:

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