Boomers: Is it too late to save for retirement?
November 18, 2007
The retirement nest egg. Do most of us have one in place that will provide for a secure and comfortable lifestyle once we retire? Looking ahead to the retirement years, the traditional advice on when to begin a long term investment portfolio is ideally when we are still in our 20s.
For a variety of reasons, the reality is some of us might not have followed that financial advice two or three decades ago. For those who have not set aside money for retirement, a nagging little panic is beginning to set in as the retirement years are gaining on those now in their 40s and 50s.
Although surveys indicate boomers do not plan to retire at the accepted age of 65, when we do start to retire not one of us is counting on Social Security benefits to meet our financial retirement needs.
Is it too late to create a retirement nest egg?
Not according to MSNBC’s Boomers: It’s not too late to nurture a nest egg — Even 50-somethings have time to map out a plan for retirement. For someone in their early 50s, it will take a yearly savings of $16,000 dollars earning seven percent annual interest to accumulate a $300,000 dollar nest egg that will provide $1,000 a month at retirement and beyond. It is up for debate whether $1,000 dollars a month will provide a comfortable retirement lifestyle and depending on the lifestyle each of has grown accustomed to, the yearly amount put in retirement savings might need to be realistically adjusted.
Sure — saving $16,000 dollars a year is much easier said than done for those of us with kids still at home, kids in college and elderly parents in need of care. Jeff Brown, author of the article Boomers: It’s not too late to nurture a nest egg offers practical suggestions on where to cut corners to begin adding to the retirement nest egg.
As Brown states, “Remember that a dollar saved today is worth a lot more than a dollar saved in five or 10 years, because it will have more time to compound as an investment — to grow as you earn interest on interest.”