When It Comes to Retirement, Mom Had it Right

When It Comes to Retirement, Mom Had it Right

By Burt Carey


Click onto your favorite search engine and type in the words “retirement calculator” or “saving for retirement,” and you’ll get some amazing results. If you’re like most Americans, you’ll freeze right there because the most striking result is the reality of how little you’ve saved for retirement.

retirement calendar, mindset, saving for retirement, finances, smart planning, life simpleAdvice for how to save is virtually ubiquitous, and while all the sites claim to know the best formula, they all differ in their strategies up to and beyond the point you stop working. Oh, and the number of those sites tied to a financial services company trolling for business…

Frankly, it can be overwhelming, frustrating and confusing just to find the simplest advice. Forget all the talk about diversified portfolios, traditional or Roth IRAs, aggressive, moderate or conservative investment strategies. Saving for retirement doesn’t have to be complicated. And yet 52 percent of U.S. households age 55 and older have no retirement savings, according to the Government Accountability Office.

In a perfect world, of course, we all start saving for retirement in our early to mid-20s, tossing at least 10 to 15 percent of all wages into a 401(k) or IRA retirement account, and we continue on that path through whatever age it is we decide there’s a big enough nest egg to allow us to live, be healthy, travel and buy ridiculous numbers of presents for the grandchildren. Unfortunately, the world isn’t perfect.

Life happens.

  • Economic downturns: Remember the past six years?
  • Health issues: You know or are related to a cancer patient.
  • Unemployment: The nation’s unemployment rate increased from 6 percent to double digits in less than 14 months just a handful of years ago.
  • Children: The cost of raising one child to the age of 18 is now more than $250,000, according to the US Department of Agriculture.
  • Aging parents: The first Baby Boomers reach age 70 in 2016.
  • Employment changes: While there’s been volumes written about those “job-hopping” Millennials, most of them face a labor market that will require more than a dozen job changes by the time they reach their mid-40s.

Not to pick the pocket of well-meaning financial advisors and others who benefit financially providing counsel where retirement savings should be invested, but they are in that business to propel their own retirement aspirations and goals, and they use other people’s money to do it. Cynical? Possibly. Prudent? Absolutely.

Mom’s kitchen table always did and always will provide the best advice: Spend less than what you make. Live within your means. Don’t sell your soul to the company store. If you want to buy something, save for it, then pay cash. Avoid debt.

Any of those sound familiar?

Mom didn’t tell us to take out a loan on a new car, or to charge up the credit cards. She taught us how to shop sensibly, and assured us that rice and beans is a perfectly legitimate and healthy meal. She also taught us some slick ways to save.

Skip eating out for lunch once a week and put that money aside. What is it after a month? Thirty, forty dollars? What’s $400 per year compounded at 6 percent interest over 40 years? It’s over $20,000. Now, is it worth dropping a second lunch each week?

It’s true that such saving isn’t going to make you a millionaire in retirement, but the mindset very well could. After curbing lunch once or twice a week, what other frills could be cut? Now the pressure of paying for the mortgage, utilities, transportation, food and cell phone with data plan don’t seem to be eating as much of your paycheck. But in reality, it’s the unplanned dollars spent that break a monthly budget.

So planning for retirement can be just that simple. Like Mom said, live below your means — and save.

Source:  Sportsmans Lifestyle

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