Retirement: Fantasy versus Reality

Bank on Yourself Revolution book cover

By Pamela Yellen: Excerpt from The Bank On Yourself Revolution

“Errors of human judgment can infect even the smartest people, thanks to overconfidence, lack of attention to details, and excessive trust in the judgments of others, stemming from a failure to understand that others are not making independent judgments, but are themselves following still others–the blind leading the blind.” — Robert J. Shiller, Professor of Economics, Yale University

According to a 2012 AARP survey, 72 percent of baby boomers believe they’ll be forced to postpone retirement, and half have little confidence they’ll ever be able to retire. How can this be? To me, it’s obv

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8 Responses to Retirement: Fantasy versus Reality

  1. Petunia 100 says:

    “According to a 2012 AARP survey, 72 percent of baby boomers believe they’ll be forced to postpone retirement, and half have little confidence they’ll ever be able to retire. How can this be? To me, it’s obvious: So many of us blindly followed the conventional investing and retirement planning advice”

    To me, it is obvious that so many don’t follow conventional wisdom. Conventional wisdom would have workers regularly tucking away 10 – 15% of earnings in diversified portfolios, and keep their hands off until retirement. Is that what is happening? You go on to note that more than half of workers have less than 25k saved.

    Logic dictates that either your fact is untrue, or your conclusion is wrong.

  2. carlyt says:

    The key is to start planning and saving/investing early in life, be consistent, take advantage of any employer matching plan, max out contributions when possible, eliminate debt, avoid risks with your nest egg and plan for multiple streams of income once retired (social security, pensions, dividends, part time work, etc.). There is a great deal of information about retirement available on the web.

  3. getforfre says:

    How do you really prepare for retirement and don’t run the risk of inflation? Any money you save might become worthless due to inflation. I am young, but even I noticed that almost everything costs 2x more now than 10 years ago. Gas actually costs 3x more. Rent, food, clothes — all costs more now. So, if I save a $1 today, in 40 years it will only worth about 13 cents.

    I think, I would like to have a paid off house with low overhead (utilities), a vegetable garden, some animals for food (chickens, a goat), lots of fruit trees, so the expenses would be low, about $300-400 in todays money, so the even lowest social security income or even some kind of welfare income can cover it.

  4. SGC says:

    How can I eliminate debt if I max out my contributions to a plan I can’t touch until I’m 60? Invariably, something will happen during the course of my lifetime that will require a large infusion of cash. If my money is on lock down because I’ve maxed out my contributions, I will need to use debt for unexpected events, right?

  5. Petunia 100 says:

    You can’t avoid infation, getforfre. That’s why you need to invest your long-term money, not just save it. :)

  6. Petunia 100 says:

    If you can’t afford to max, then don’t max. Put away what you can afford to put away. :)

  7. Petunia 100 says:

    I just want to add that I think this “Bank on Yourself” thing is a huge scam. It is just a new way to sell an old product, namely whole life insurance. It uses the same type of fact-twisting that traditional whole life insurance salespeople use, to push a high-commissioned low-quality product on the unsuspecting. Oh, and to sell books. Let’s not forget that.

    Pass.

  8. Life Agent says:

    Petunia, I’m not a “Bank on Yourself” authorized advisor but will tell you that, based on your comment, you know nothing about how the product of life insurance works and the tool it can be during an entire lifetime. High commission? We life insurance advisors make more commission selling 20 year term (some carriers pay 105% of the premium) vs whole life. So, before you bash, please be sure you understand. You can compare notes at age 65 with my 18 and 20 year old kids that have permanent insurance :)

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