Countdown to Retirement: A Five-Year Plan

Has the prospect of retirement taken on a sudden, terrifying urgency? Here are the financial planning moves you need to start making now.

Comments: 108

  1. Laughing out loud.

    I absolutely love how these articles always assume people have investments, a nest egg, and a large income.

    What a joke

    Now write a retirement article for the other 98%.

    It won't be rosy.

  2. First decision: be prepared to die. It is less costly and less traumatic than disease. You end up in a better place or Russia, which is quite fascinating, too.

    Second: get rid of your car. Use public transportation or a moped if you absolutely have to.

    Third: Do not gain weight. Keep wearing clothes you wore in college in 1978. Fabric quality and construction were excellent.
    Clothes lasted then.

    Fourth: Beans Cabbage and Rice.
    All for under 99 cents a pound.
    Spices are amazing and can disguise those three things unbelievably. Ask any person from India, China, Africa, or South America. A few more of my favorite places. Close your eyes and hear the music. The aroma is in the air. Dance. Vacate your mind.

    Fifth: apartment rent will take up about 10-12000 per year and continually rise. (Outside of The coasts, aka on the inside of America). This will be 75-85% of your expenditures. The smaller the apartment the smaller the heating or airconditioning bill.
    Well , it cannot be all fun and no worries.

    Sixth: somatic exercise: a bunch.
    Even more than that. You wont realize what your missin. That is your mission.

  3. Except for the gas... good fun and relevant comment !

  4. They also assume that you own a home. I live in the SF Bay Area where many people do not own homes, no matter their age.

  5. You lost me at six figures. Thanks, NY Times, for helping those in already pretty good financial shape prepare for the home stretch. Why not tackle the unthinkable...the rest of us who don't make six figures and, thus, don't quite have the luxury to do any of this. The working poor in our society is growing and, yet, continually ignored.

  6. You don't have to make six figures to put away a small amount each paycheck. If you had started with $25 when you first started working, you'd be far better off than you are just sitting around complaining that no one is helping you. The real problem is that most people don't bother to learn enough about finance to help themselves.

  7. Exactly what I thought.

  8. Here's a great blog on how to live and save and retire early on less, using much more realistic numbers! ;) Many have mentioned being debt and mortgage free is key. You don't need to buy the MaxiFi Planner if you can read and do math. My online credit union allows me to track my spending and create spending reports which I have been doing for the past 5 years and there are plenty of online calculators that aren't trying to sell you something. Here's one that I have used:

  9. Five years to go and you're starting to think about retirement? That's great, but... you're thirty years too late.

    Before retiring, I would sometimes teach a math class for liberal arts major that had a section on personal finance. I would show an example of two people saving for retirement.
    Person 1 would save a fixed amount each month from 25 to 35, and never deposit another dollar. Person 2 would save that same amount monthly at ages 35 through 65. Using the interest rates at the time, Person 1 would come out ahead at age 65!

    The example doesn't work as well at today's historically low interest rates, but those rates won't last forever, and the lesson is still a good one. Best wishes for your retirement, but make sure your children are saving for theirs *now*!

  10. This is hilarious. I lost everything in the Great Recession. My job--followed quickly by my house, car, savings, 401(k), personal IRA, and even most of my furniture and decorative items, which were sold to pay for a moving truck when the bank took my house. I have nothing. I'm in my late 50s and have, out of necessity, abandoned the idea of retiring with anything more than my Social Security (assuming the current administration doesn't make off with it)--and that's if I can retire at all. I have managed over the last five years to get and retain a good job, but I still can't afford a car (thank goodness for Chicago's excellent public transportation) and will never be approved again for a mortgage. Other than a few thousand I've managed to squirrel away, I have nothing. And I'm not alone: There are millions just like me. Now how about writing an article about how WE can retire?

  11. Here's the real deal:

    If you are a working person in your 50s, the most important thing you can do before retiring is pay off ALL your debts.

    If you cannot pay off your debts -- and your only asset is your house which is mortgaged -- you cannot retire.

    Depressing I know. But if you retire with debt you will always be one step away from banks and creditors taking your house and car. And after that hspprnd, you will be looking at poverty and not many life choices.

    Have substantial wealth?

    Getting your Will and Trust and health directive is all VERY important and should completed be at 50. A good lawyer will help with all of the above.

    This article needs to address the issue of personal debt and retirement planning up front.

  12. Every article I've read on retirement must be written by the same person who only knows people who make 6 figure salaries and own homes. I was yawning in boredom or snorting in derision after the 4th paragraph. This is utterly unrealistic for a majority of the population. I am an academic, college professor, whose take home pay is 36,000 a year. I live in San Francisco in a rent controlled apartment, thank Heavens. Being a single parent who raised my son in said rent controlled postage stamp sized apartment I worked supplemented my pitiful academic salary that was even smaller then by waitressing and working retail. Saving for retirement began when I was 48 due to the fact that I could barely make ends meet until then. I have educated myself and squirreled away more than I ever thought I could. But these articles are insulting. If I want to stay in San Francisco, my home for the past 48 years I will need to work until I'm carried out of the classroom feet first in a body bag. There are way more people like me than the perfect fictious couples, (notice how it's always couples) in these sorts of articles. Please just stop.

  13. Well said - I have been self employed for most of my life. Income is never predictable. A retirement size that fits all is simply unrealistic.

  14. Jean - you rock. Well said and best of luck to you.

  15. Was it the Times or the Post that recently had an article that stated $117,000 qualifies as low income in San Fran?

    Those of us not in the top 2 percent who live in a coastal metro area are faced with living like paupers or moving away from our friends and families.

  16. I worry about the expensive part of old age, when you need assisted living, home health aides, or a nursing home or Alzheimer's unit. Even having to move to an elevator building would add to living expenses.

    Other than that, a person can live fairly cheaply.

  17. First things first: social security is set for bankruptcy in 2034. So if you are 50 or under, totally remove the promise of social security from your calculations NOW.

    Thanks, Boomers! You had the largest inherited transfer of wealth in the history of the US. You took everything, let everything else fall apart, and left us with Trump to boot.

  18. SS is not going bankrupt and will not 'end' in 2034. In a worse case scenario, the Trust Funds will be exhausted and SS will only have enough to pay out what it takes in on an annual basis -- which will amount to about 75% of its estimated obligations at that point. I doubt Congress, especially if it is in democratic hands, would allow that to occur. SS can be easily fixed by some combination of higher taxes, changes in retirement age, increases in the income threshold subject to withholding, among other options. Stop being an alarmist and rely on facts, not fear.

  19. Wish I could like this comment a thousand times!

  20. And my most recent statement reflected that - new retirement age of 67.5 with an estimated 70% payout for a person born in 1970.

  21. These articles need to stop using 65 as the retirement age. Most people I know are laid off from their jobs in their mid to late 50s. They might work after that, but usually at a lower salary and few, if any, benefits. They no longer contribute as much to their retirement. I always tell our just-starting-to-work relatives that they need to save aggressively early in their career to provide a cushion for the years when saving is harder or not possible.

  22. And the full retirement age is I believe 67 not 65 and probably should be increased.

  23. Right now, this minute, I want to see a photo of Peter Finch and access to some kind of linkedin page or something telling me about his age, background, education and whether he inherited money.

    I gotta see who wrote this.

    And I'd love to know how much he makes and what age he is.

  24. what does it matter? I just looked him up and he's figured it out. He has the degrees and is making more money than most people can even dream of. In his world he doesn't know too many people who earn less than 250k. He'll have his inheritance plus whatever he saves. My suggestion to anyone would be save 15% or more of their income into a target date fund but most people buy when they should sell and vice versa and save less than 10%.

  25. When I read comments like the ones included here, I'm amazed that there isn't some sort of national registry for those aged 55 and up to share their living arrangements. I'm sure many people have homes that can accomodate one or two other adults. The only way many people are going to make it through their later years is if they share their living expenses. They used to call such places 'boarding homes' -- and I think they better make a comeback soon! Imagine an apartment building in NYC where at least 5 residents are each paying $1800 per month in maintenance costs (co-op mortgage is paid-off) and they are trying to live on social security of $2500 per month. By coming resources and moving to another location, they could easily stretch their incomes. If there was some sort of registry, they could find other like-minded adults. The algorithms for 'compatibility' already exist, just need a bit of tweaking for non-dating scenarios. Some entrepreneur needs to run with this idea.

  26. It's called "The Golden Girls". Seriously, the trend to share your home is a good one. A trend that is growing is for retirees to share with younger people just starting out. Physically, younger people can do things oldsters my not be able to and retirees have experiences and knowledge that youngers may lack. A win-win all around.

  27. I think about this all the time. I'm almost 56 and, thanks to the Great Recession, have nothing. I am also single and have no family left to assist me (it's just obnoxious how articles like this always assume a spouse is in the mix, despite the fact that more than half the U.S. adult population is single). Despite working since I was 15, I'll be lucky (really, really lucky) if I will be able to afford a decent one-bedroom apartment on my expected Social Security payments. Communal and co-living arrangements are great ideas for people like me, as are communities of tiny houses (which still face zoning problems in most areas of the country). Someone who can organize affordable group living arrangements that still allow for a private feel could not only clean up, they could help an awful lot of folks like me.

  28. There are a host of good portals and apps out there permitting the type of forward-looking analysis of your costs and assets that MaxiFi planner promises - and they do so for free.

    The key distinguishing feature of MaxiFi, as I see it, is that it promises to determine whether your current spending rate is sustainable. Gearing any of the free services to achieve that aim is easily done.

    You just need to establish what you realistically do spend, or will spend. This is a different answer from the standard fractional percentage of income, used by most online calculators at holders of 401k or IRA accounts. Most often the needs-based, or current spend-based number is lower than most folk expect, and that the likes of Vanguard or Fidelity project. (Especially so if they are saving near the maximum in tax-advantaged accounts - effectively cutting their available income by a substantial fraction).

  29. What are some of the retirement analysis apps/portals you would recommend?

  30. Please allow me to join in on the chorus of folks who don't have millions of dollars in IRAs, who don't make six figures, and who don't keep attorneys, tax accountants, and financial planners on hand. I laughed or eye-rolled through most of this article. How about one for people with more modest means?

  31. Very few people fit the hypothetical profile of having another five years of a six-figure salary ahead and millions in retirement savings. I certainly don't, especially after losing nearly everything in the 2008 recession. There is a book aimed at people with more modest incomes: "The 5 Years Before You Retire: Retirement Planning When You Need It the Most," by Emily Guy Birken.

  32. The most important part of planning to do in the last few years before retirement is to pay down all debt. Be sure the house, cars and student debts are paid and that credit cards are manageable to the extent that they can be paid in full monthly.

    After that, prepare yourself emotionally for asking yourself the question “just how long will I be around such that I will still need money”. Confronting your own mortality was an eye opener.

    After that, you can start to plan your cash flows.

  33. One important note to paying down debt! if you have government loans, not private loans, it is unwise to pay them off early. this is because those loans die when you die. ( They're called strictly personal loans.) So just pay your monthly payments and hope you live long enough to finish. If you prepay and die younger, your estate just lost an asset!

  34. “Let’s say you are a single 60-year-old earning $140,000 a year. You have $1.5 million in your 401(k) and will contribute 6 percent of your salary to it, or $8,400, a year, along with a 3 percent match from your employer until your planned retirement at 65. ”

    This is hilarious on at least five levels: 60 year old whose job hasn’t been right-sized or outsourced, 140k/year for a job they can pay an intern nothing; 1.5 million in a 401k; still with ability to contribute 6%; an employer that actually still has a retirement plan.

    Maybe you could rewrite this article with nationally relevant statistics?

  35. Exactly my thought! Many retirement advice articles have hypotheticals like this. To me and my friends -- professionals in our 40s and 50s who make around $50,000 a year--this scenario is so far-fetched that it's not useful. We're a frugal lot, but we're never going to have $1.5 million in a 401k!

  36. A person who is working a job that pays this much cannot be replaced by an intern. There is no way an intern could replace me, but I’m only 35.

  37. All the younger folks reading this article should also take the time to read the comments. You'll learn something about early planning so you don't end up in the hole like many people.

  38. Reading the comments, you see a lot of people who were doing okay until the crash and then they lost everything, or nearly everything, or people who had a good paying job, got kicked to the curb and are working for half of what they used to. These people will never be able to get back to where they were.

    Those people did not put themselves into a hole. They lost it all. There's no guarantee that today's young who save, live within their means and buy a house/car, have kids, etc., won't meet the same fate at some point so the whole "don't be like me" does not apply to many who are struggling today.

  39. Indeed! During the crash, I was lucky to get a job with health care benefits at the age of 57 and a retirement plan. I took a 30% pay cut and, after 8 years am up to what I made 18 years ago! I'll be at this until my dead head drops on the keyboard of my desk!

  40. First thing Americans should understand is that agents that take commission from somewhere else or a cut of your accumulated wealth are not necessarily working for you. That includes your real estate agent, divorce attorney or financial adviser. These people by and large work for themselves and their objective is to maximize their commission while closing the transaction with the least effort. The buyers agent is actually paid by the seller so he has no obligation to the buyer, though everybody in the real estate chain ultimately gets paid from the loan the buyer takes out when the transaction closes. The financial adviser has no fiduciary responsibility to you and may take commission from various sources for directing your investment to profit themselves without any disclosure. When the markets are going up, all this chicanery gets hidden by the capital gain, but you don't get this money back when you find yourself exposed when the markets invariably start going down. Most of the financial news that appears in the form of analysis is written by people with a vested interest. Whether you are 50 or 30, the sooner you understand that you are on your own to manage your money or protect it, the better off you are going to be.

  41. The outright refusal of most Americans to save for retirement throughout their working years is their fault, not mine. Instead they bought all those big screen televisions, I-phones for every member of the family, went on expensive vacations, bought a new car every other year, and spent like drunken sailors. No pity for them. None at all. You reap what you sow.

  42. And, they are waiting for someone to bail out their golden years. I cannot remember the number of people who cannot figure out how they are going to retire, yet live exactly as you described. So many people don't bother to put their financial house in order when they have the ability to help themselves. It's maddening because we, eventually, will probably bail out their stupidity.

  43. Struggling to be composed and productive despite an incorrect diagnosis requiring years of underemployment I plan to work until I die

    I blame no one but believe you should allow for scenarios beyond luxury goods

  44. Or maybe they blew all their money on property tax and medical insurance?

  45. Normally, I find nothing new or useful in articles like these. However, I want to thank the author for this incredibly useful tidbit: “If you don’t start taking Social Security payments and withdrawals from your tax-deferred individual retirement account until later years, you may find yourself in the 22 percent or even the 12 percent federal tax bracket for a while...You can take advantage of this by converting some of the money in your tax-deferred I.R.A. into a Roth I.R.A. during this window.”

  46. Yes but you will likely need a tax person to handle this for you. It is complicated and takes monitoring and forethought and knowing all of the tax laws local and federal. Converting IRAs can be a nightmare if you do not do it exactly right.

  47. Here is another tip along the same lines. If you are in the 12% tax bracket your capital gains tax rate is zero. If you have stock in a non-tax deferred account, you can sell the shares and repurchase them after 30 days (wash rule). The capital gains are added to your taxable income that year, so you can take enough gains to get to the 12% bracket limit ($38,700 for individuals and $77,400 for married couples).

    Then when your income goes up as you take Social Security years later, your cost basis is higher in this stock, and your taxes would be lower when you sell it. This is called capital gains harvesting.

  48. Good advice on cap gains harvesting. You can take the gain and buy the same security right away, I usually do it the next day. If it is a gain then you do not need to wait 30 days. The wash rule is for losses only, the IRS doesn't want you getting too easy of a tax benefit from taking a loss, which can be used to offset ordinary income after offsetting a gain. The IRS does not mind you taking a gain which is a taxable event (even though you may be doing it as an advantage). I buy it right back so that dividends remain qualified and so that I do not miss the ex-dividend date.

  49. This article reminds me of the old Steve Martin joke in which he claimed he could show you how to become a millionaire: “First,” Mr. Martin would say, “get a million dollars.”

    Does the author realize how few people make 140K and/or have $1.5 million in retirement savings. What a joke.

  50. The author forgot to mention, getting two dozen clients like her is his own retirement plan!

  51. Full(er) Steve Martin joke: "I can tell you how to get a million dollars and never pay taxes. First, get a million dollars. Then, never pay taxes!"

  52. Thank you, Randy. Your Steve Martin reference made me laugh out loud. (And thanks to Steve, as well.)

  53. Who in the world is this 60-year-old woman making $140,000 a year (even those of us who made that at some point have gone to a lower salary now), $1.5 million (!) in her 401k alone. A company that matches her 401k? AND she's going to get a pension. AND she owns a half-million dollar house?

    Gawds, I stopped after the 4th paragraph.

  54. So did I! I am 60, single, and a professional who makes not even half that. Never made more than I do now. No 401K and my annuity disappeared along with my former job in 2008.
    I cannot identify with whomever this article is targeting.
    It's Ridiculous.
    Please print something helpful.

  55. Like the majority of commenters, I agree there needs to be more articles about people not lucky enough to be in the scenario described.

    However, I am lucky enough to be in a similar scenario, so I appreciate there are also articles like this. Thanks NYT for including. I learned a few things and there were some great reminders. The commenters also reinforced my need to keep saving for the inevitable job loss in my 50's.

  56. While I agree somewhat, it's like articles on Yahoo about retirement savings. Do you really think that people who never saved are reading these articles? The people reading them are mostly people who saved and were thrifty all their lives.

  57. For millions of Americans, unfortunately retirement is but a dream. Find something you love to do and hopefully this can support you as well as since most of us will be doing it a lot longer than we might like. Retirement is not all it's cracked up to be for many. Travel now while you are still healthy. Retirement can be extremely socially isolating and many are challenged with a sense of purpose. This article has a great tip: try retirement out being fully committing to it. I'd recommend at least 6-9 months on a trial basis. It could be very eye opening and reset your priorities.

  58. 1.4million dollars in 401K at age 60? Who has that kind of money? Reading this is just depressing.

  59. SSI is hardly government assistance and the assertion that it is is indicative of a really toxic state of mind

  60. 1.4MM @ 60 doesn't sound like that much. My wife and I (58) didn't start retirement funds in earnest until I got out of the military after 9 years (30yrs old with no pension or other benefits). in roughly 25 years we each have more than 1.2 million, house is paid for (550k) and we have a years expenses at the ready. It takes discipline ,desire, and resolve... but if we could do it anyone could. Former submariner MM1/SS, neither of us worked for state,local or federal government after my term of service.

  61. My husband and I are 58 and together have 1.3 million in our retirement accounts. We're lucky that we had an employer match- but we started saving for retirement when we were 25- and I had many years of part time work- but always contributed 5% a year. Once we hit 50, we started making catch up contributions.

  62. Median income for those with a college degree is $70,000 and increases to 90k for professional degrees, and to $150k for those from top schools. Then we have the doctors and lawyers and tech execs who make 200-500k. I won’t even list hedge fund managers who shame us all.

    My point is that the target audience for the NYT is highly educated and high earning families, so stop complaining about their articles that are speaking to other readers. These readers pay to subscribe and the NYT has to earn an income too.

  63. Give thought to the fact that if readers are commenting on this article the odds are very good that they, too, are paying customers. The Times got a huge surge in subscriptions after the election. I was one of those and my income is nowhere close to the numbers being thrown around in that article.

  64. You need to consider retirement starting the first day you begin work. Waiting until you have only 5 years to retirement is way too late.

  65. Here's the real story about retirement and why it's a fantasy for most.

    The top .1% of wealthy Americans (a tiny number - one tenth of one percent) have more total wealth than the total of 90% below have.

    Another way of stating that which will hit you:

    A town has 1000 people.
    1 person in that town has more wealth to himself than the total wealth of 900 other people in that town.

    With that much wealth concentrated in that one person's hands, can the rest of the people in the town do well?

    Can restaurants and shoe stores and auto mechanics and gift shops thrive and provide jobs for those 900 people if the customer base in the town is limited to a small number of residents with disposable wealth?

    What if those 900 people had a more equal share of the wealth that was concentrated in that one person's hands?

    Maybe commerce in that town and employment in that town would be more robust. Maybe employers would see fit to support retirement plans if the laws of the town were fair and oriented toward working people.

    Maybe, among those 900, people would be wealthier and many would have savings.
    Maybe a lifetime of saving and laws that favored average folks for would afford them a chance to retire with some security.

    If we prohibited that one person from getting together with other people like him in towns all over the country to plot ways to increase their wealth, using lawmakers whom they essentially own for favors…


    People in that 900 might be able to retire.

  66. Maybe the wealthy guy earned what he has. Maybe he developed great ideas into profit. Maybe the 900 didn't. Maybe he didn't buy political favors. Maybe he contributed a city park, donated books to schools, and sponsored a Little League team. Sure, wealth can be full of corruption and favoritism, but that isn't always the case. And life doesn't always consist of the rich versus the poor.

  67. The wealthy person did not get there without the support of everyone else. Our system is constantly being gamed to ignore that reality in ways that add more to the already wealthy. A civil society cannot remain so if it's resource are so imbalanced as exists now.

  68. Be cautious about 401(k)s; they are not magic protection for retirement. Their investment values can go up and down like the stock market. Also, they can have high fees that almost wash out the employer contribution. Suppose you have a 401(k) balance of $25,000 with 35 years to go before retirement, you make no further contributions, and your annual investment returns are 7 percent. In 35 years, your account would grow to $227,000 if the expense ratio is 0.5 percent, but to just $163,000 if the expense ratio is 1.5 percent. That 1 percentage point difference reduces the balance by 28 percent. And the more you contribute, the more goes into fees -- even if the account manager is doing nothing. Until about 2012, fees could be hidden. When I left that employer, I immediately rolled my account over to an IRA with a private investment company.

  69. This article as good for a certain segment of readers, but the vast majority of people in the US are not earning at these levels. For ANYONE, regardless of income, interested in retiring in the next 5 years, I can't recommend Emily Birken's "The 5 Years Before You Retire." Since there was already a book on the subject, I was actually a little surprised that Mr. Finch didn't go to the author of that book for research.

  70. This should read that I can't recommend it ENOUGH. It's a great book. Very well organized and informed and made me think of many things I hadn't thought of before. I wish the author had spoken with her.

  71. Laughable. A million in your 401k. Roth IRAs. Right.

    The ones more in need of advice are the regular workaday people who have 80 grand in a savings account, no 401k or one that maybe matches the amount they've saved, and are heading towards 60.

  72. The advice for these folks is easy. Save all you can, and delay taking social security until age 70. And if that’s still not sufficient income, consider a reverse mortgage.

  73. The advice for a person with $160,000 saved at age 60 would be to work to at least age 70 if at all possible (both spouses if a couple), downsize drastically immediately, and live on as close to your future retirement income as you can, if not below. That number, assuming another $90,000 in savings and typical real asset growth, would be around 4-4.5% of $250K, or $12,000 or so per year plus whatever social security is expected. At age 70, when SS is max, a person earning $60K would get about $30K/year (per one website I checked) and a nonworking spousal benefit would bring the total to about $45K. So a total of $57K/year for a couple. There are places in this country where life could be quite decent at this level, and there are definitely some truly excellent places, very affordable, outside the country where ex pat communities thrive. So drop the resentments, accept reality, plan, work, be extremely frugal, save and be optimistic. And for God's sake, don't think Trump is your lifeboat.

  74. All this wonderful advice about retiring. Most of the people I know, college educated, hard working, with or without children, will be unable to retire. Why? We've been underpaid so that CEOs can earn obscene amounts of money, have golden parachutes when they're fired or retired, so that shareholders get a nice big return while we work for peanuts, and because those of us born in the latter part of the baby boom were so plentiful that we had to take whatever jobs we could. We've also lived through extended unemployment at least once and drained our savings.

    The advice being given out at every workplace and in every publication is irrelevant. It doesn't take into account the fragility of employment, age discrimination, real life, etc. As with medical care in America, the European countries seem to do a better job for their citizens. They don't have blind faith in capitalism.

    I used to save in an IRA and a 401K. That ended when I was downsized and unemployed not once but several times. I realized after the second downsizing that I needed most of my money to be in liquid form: immediately available.

    A word of advice to our government and our businesses: if you want people to buy, don't stop hiring them once they're over the age of 50. Don't downsize just because you can. Invest in your employees rather than firing and hiring new ones. Treat employees like human beings, not widgets. Pay us decent wages. Provide pensions.

  75. The New York Times needs to write an article that realistically reflects much of the middle class and below. For most people, all they have is Social Security benefits; period. For those, in public service, they have a retirement pension, in lieu of Social Security. And, a small subset of these people have a 401k or an IRA.

    Many people lost their jobs, during the Great Recession, used up their IRA/401k to survive, and had to start over. Unemployment benefits, average maximum of $300/week, barely helped to cover housing, food, utilities, etc. So, savings, and large tax hits, were the result.

    So, today, if any of these working people have $100,000 saved, outside their home equity, its a miracle.

    Now, throw in the curve ball, trying to stay employed until your are 62 - 67. All employers, including government, find a way to push out anyone over 60, let alone hire anyone over 60.

    The point is, for many people, there is no 5 years to retirement. And, those who eked out savings, only delay the inevitable. That is, ending up dirt poor in retirement, with an average of $700 a month Social Security or worse. Who will hire someone over 60 to help make ends meet?

    So, as the largest generation, population wise, is not passing 60 and beyond, a major train wreck is going to be in full bloom, in about 5 years or so. The midpoint of the boomer generation reaching retirement age.

    But, who cares, the subject of this article have their huge tax cuts, the rest will be told to eat cake.

  76. Complaining about excessive CEO salaries your whole life is not a good retirement plan.

    Adding tax-free dollars into a 401k as soon as you begin your career is a better plan, even if its only 5% of your pay. You'll barely miss it.

  77. I don't hew to the "gradually increase bond exposure" mantra. Other than TIPS, bonds are not for 401K investment until one is close to retirement. Stocks should be index only for most people. Here is a way to think about the situation for those readers who are conspiracy theorists: the 0.1% own 80% of the market-- the 0.1% will change the rules so that the market "goes up" (on average) over time. Ride their coat tails, and don't waste money on fakirs lining their own pockets by preaching alpha. There are several corollaries and lemmas related to the foregoing, but not enough space to expound on them here.

  78. Several years before I retired, I calculated what my post-retirement income would be. I sold my home and down-sized into an affordable condo, which I paid cash for from the proceeds of my home sale. I slowly started eliminating unnecessary expenses.

    Two years before retiring, I started living on the amount of money I would get after retirement, about a third of my salary. I saved the rest. By the time I retired, my car was also paid for.

    I discovered that my life was not negatively affected by living on such a modest amount.

    Just wish I had started saving that money sooner!

  79. Surreal that you think most of single America earns over 100,000 and has 1.5million in the bank. I suggest you check your privilege, look at some real earning numbers and get back to us with another try at it....

  80. perhaps is the United Sates of Monaco...

  81. I am 60, single, and a professional who makes not even half that. Never made more than I do now.

    No 401K and my annuity disappeared along with my former job in 2008.

    I cannot identify with whomever this article is targeting. It's Ridiculous. Please print something helpful.

  82. Few Americans save for retirement, which means properly planning for retirement means enjoying a lower standard of living than your peers during your working years. Retirement planning may require sacrificing your desired job, location, house, car, vacation, or any number of things. Too often, these sacrifices are ignored because they are hard and no one else is doing it.

    Retirement requires sacrifice or you will be at the mercy of the government. In Mr. Trump's America, that could be a dangerous place.

  83. Dear NYT -- as many other commentators have said, it would be extremely useful to see 5-year countdown advice based on income/savings that is half the amount used for this article.

  84. The steps would be the same regardless of how much you make or have saved.
    1. Figure out how much you have saved
    2. Figure out how much you need/want to spend in retirement.
    3. Deduct estimated SS and pension earnings from number 2 above.
    4. If number 1 above is 25 times (or greater) the result of number 3, then you should be financially prepared to retire. If not, you need to save more, delay taking social security, cut your expenses, or keep working for a few more years.

  85. Run the numbers on how much you would have if you gave up cable and saved the 70.00 plus a month for 30 years. It might not be enough to retire on but it would be a substantial nest egg. Why do working class people give their money to corporate interests when they need to save it? You can check out the HBO shows on DVD from the library. This article assumes that the person who saved 1.5 million had a typical middle class lifestyle. What if the person was a fugal saver?

  86. The answer to everybody's question ("How much do I need?") is another question: "How much do you spend?" Here's how you figure that out:

    Step 1: Grab a year's worth of bank statements, credit card statements, etc, and add up how much goes out the door in 12 months. Don't get distracted by a particular expense, just add it all up. That's what you spend - now.

    Step 2: See where you can cut.

    Step 3: Now add back what you cut in Step 2 - because that represents inflation, which will certainly figure in. Cut now anyway, but just understand that things will get more costly in the future.

    There's your answer. Step 1 is work. But you are the only one qualified to do it.

  87. It is almost impossible for anyone to save $1.5MM by the age of 60, contributing 9% (with match) to their IRA, with an ending salary of $140K. If you assume a starting salary of $33K in 1981, a salary increase of 5.5% annually until age 50 (dubious) and then fixed at $142k going forward; a return on savings investment of 9% annually, (LT S&P avg w/divs; infl. adj) ; you just might make it but it has to be a perfect scenario, (no job changes; no big expenses, no children?) . You also need to subtract taxes, housing costs, and other expenses (at least 40%) to see what you have left to live on, particularly in the early years. But you wouldn't have money to buy a house and in my calculations you'd have disposable income of $2K/[email protected]; $3K/[email protected]; and $5k/[email protected] to cover medical, education, commuting expenses; clothing, food, etc.

  88. “If you assume a starting salary of $33K in 1981 . . .”

    My starting salary in 1984 was $16,000 for a job that required an undergraduate degree.

    The low amount may have reflected my gender: female.

    So from my POV, $33,000K is quite an assumption.

    I’m in my mid-60s, hope to work til 70, and expect retirement to be one money struggle after another.

  89. Useful article, but these illustrations are atrocious. If retirement looks like that, I think I'll shoot myself instead.

  90. For most of my working life this hasn't been a concern? To whom is the NYT talking to here?

    In the grand scheme, our household makes the top 10-15% of all wage earners in the US. We live in a very expensive city and I've been worried about retirement starting at age 30.

    I get that the NYT likes to target its real estate writing etc. to the wealthy but this article is just insulting and woefully obtuse.

  91. This is helpful even for those NOT close to retirement. Especially the first one: Face reality!

    However, I find the illustrations in this article ugly and demeaning. 60-somethings are not shapeless, saggy blobs. Anyone who goes to a gym sees plenty of older people in great shape. I plan to be, too.

  92. Re: "Let’s say you are a single 60-year-old earning $140,000 a year. You have $1.5 million in your 401(k) and will contribute 6 percent of your salary to it, or $8,400, a year, along with a 3 percent match from your employer until your planned retirement at 65."

    Who is this example based on? I know of NO ONE making $140,000, living in a high ticket area, that has $1.5 million in their 401K. I suppose there may be folks out there who have managed to contribute this amount. If not, it's just a stupid example.

  93. Dear New York Times:

    With all due respect, I find this to be one of the most utterly clueless and tone-deaf pieces of late—actually ever (long time reader, here).

    Outside of the Real Estate section, which is mostly pitched at your metropolitan NY audience, this piece displays a stunning degree of insensitivity and lack of audience awareness.

    Yours—at least the edition I'm reading on line—purports to be not only a national but international newspaper. This covers a lot of readership ground, even if mainly urban.

    I live in a small city—Eugene, Oregon—and while quite different from New York, overlaps (hold your breath) demographically in important ways: we are well educated, professional, "cultural," foodies, and liberals. We maybe are not quite as "ethnic" as you, but still...

    And, we read and love you, NYT, because you speak to our progressive sensibility and provide credible news and thoughtful viewpoint. Your are vast and contain multitudes...

    But you are not always reflective of democratic culture. Far from it.

    It seemed, after the 2016 election, that you went through a period of soul-searching (more like mea culpa navel gazing, in retrospect) about your lack of diverse "coverage" (your tendency to flyover parts of the American polity rather than to know them first hand). You even admitted to the possibility of being out-of-touch, maybe cognizant of the resentful attitudes you could inspire in other Americans...

    And yet, apparently very little was learned.

  94. "Let’s say you are a single 60-year-old earning $140,000 a year. You have $1.5 million in your 401(k)'ll get a $500 a month pension..."


  95. I am retired. My company kicked me out at age 61, pretty much what I expected. At least they gave me a years pay.

    I was never able to make $140K in salary, but I managed to become richer than the example in the article. Due to rigorous saving and investment, I actually had financial assets greater than all the money I had made in a 35-year career - it can be done.

    Some commenters have said that being single is a disadvantage. It is in some ways, but on the other hand you can save and invest as much as you want.

    I was always an individual-stock investor - never touched mutual funds. I researched the companies, and waited for a good price.

    While the 2008 collapse was a disaster for many people in their 50s, I actually managed to make out pretty well by not panicking, and picking the companies I wanted to own from the wreckage. They've all done well, except for GE. You can't win 'em all.

    My buddies are all pretty well off. None of them worked impressive jobs, and they used various techniques to become wealthy. NY real estate, a small business, a good stock pick....there are plenty of ways.

    There are more of us out there than you might suppose. The main thing is to think for yourself, and don't trust the advice of financial planners, or believe the articles in newspapers and magazines.

  96. It is very much more helpful for people to cast the "retirement savings" problem in terms of their income level. For example, if you are looking forward to spending about as much in retirement as you do "now", you will need to have saved around 12 times your yearly wage income when you retire (say at 65). Yes, I know this is hard, I am currently 66 and have been aware of this problem for some time. This is taking into account what you will get from Social Security.

    But in order to have 12x saved at age 65, you need to have 2x saved by age 38 and about 5x saved by age 50. No one can wait until age 60 and then get serious about retirement, this will never work.

    The grim reality is that you need to save about 12% of your wage income every year starting at or before age 30. This 12% includes any matching that you might get from an employer, so for many people this would mean saving about 8% of their income. If you "get behind" you have to save an even more staggering percentage, which nearly everybody would find impossible.

    I also know, after rent and car payments, take-out and restaurants, day care or private school for the kids, coffee, vacations, and cable bills there is nothing left over for savings. For some this may be true, for the rest, you need to get serious about your spending and saving priorities or face a bleak retirement. And please don't wait until you are 60 to get serious.

  97. If I made 140,000K a year,had 1.5 million in my 401(k) and a pension plan, I wouldn't be worried about my retirement.
    I want her job when she retires.

  98. If Republicans have their way, there will be no Medicaid to help with your (our) nursing home costs, and no Medicare to give us non-millionaires access to health care.

    So if you're not in the 1%, forget financial planning. Start planning your suicide.

  99. Ya'll commenting are stuck on a hypothetical 60 year old woman's $140k salary and 1.5 million nest egg (~10x salary, not unreasonable), but ignoring the calculated $64k (or more) annual discretionary spending on food, travel, clothes and entertainment - that's a LOT of retirement spending!

  100. Said 60-year-old has clearly received a vey nice inheritance!

    It's not a typical example.

  101. Thank you to all of you who have included financial advice in your comments. Very interesting to read!

    Regarding the 60 year old example given in the article - I have also thoroughly enjoyed the widespread indignation of most of the commenters as well and appreciate the sincere frustration that was expressed. Good work everyone!

  102. A lot of my peers spent all they made, and more, since their first job. They saved little or nothing, even "borrowing" their retirement money for lifestyle desires. Now they moan and groan about how tough it is to retire. This dilemma is as old as humanity, perhaps even before that. Aesop's cautionary fable about the Ant and the Grasshopper says it all. The fact of the matter is that these non-savers are simply too late. Five years is not enough time to catch up, especially now. It is possible, however, over a lifetime, to reach retirement with enough to be quite happy, even if one is well below the socioeconomic level of this article's example. Particularly outside of coastal metropoleis.

  103. Well, have fun almost retirees. I was born in 1970 and SS won’t be there for my generation.

  104. But you do have time on your side, so I hope you're saving. There's some good advice in these comments.

  105. As long as the corrupt GOP doesn't gut it before sanity returns to this country, SS will be around for future generations. It would be so easy to put SS on a sound financial footing if the "Greediest Generation" wasn't in charge. Yes, I am referring to the Donald and his henchman Mitch.

  106. I hope that in the few short years before I retire, there are no tariffs imposed on those instant noodle cups from China. By my calculations, I will be eating them three times a day.

  107. Four words: Defined contribution, defined benefit. At age 55 and after 30+ years in public-sector professional work, I will retire with 60% of final salary. No worries about 401k or market crashes; even Social Security solvency is less angst-inducing. After living frugally all my adult life, I can cash out nicely on an apartment bought decades ago. Figure in a substantial drop in cost of living away from absurdly expensive Manhattan, and figure in the huge gain in quality of life far from NYC as well, in retirement I'll be more comfortable financially and in every other way. There are precious few of us fortunate enough to be able to say that anymore. And with the Supreme Court Janus decision, the younger generation can kiss that all goodbye.