https://github.com/mccright/funding_retirement
Preparing for and thinking about funding your retirement
https://github.com/mccright/funding_retirement
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Preparing for and thinking about funding your retirement
- Host: GitHub
- URL: https://github.com/mccright/funding_retirement
- Owner: mccright
- License: apache-2.0
- Created: 2025-07-15T16:37:18.000Z (8 months ago)
- Default Branch: main
- Last Pushed: 2025-12-30T14:34:04.000Z (3 months ago)
- Last Synced: 2026-01-03T08:16:31.147Z (3 months ago)
- Language: SCSS
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- Readme: README.md
- License: LICENSE
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README
# Preparing for Retirement
## TLDR:
* Most of us want to '*retire*' someday.
* Funding that retirement -- providing a future income stream -- requires long term planning **as well as daily, weekly & yearly execution** throughout your adult life.
* There are systemic impediments for many -- but that does not reduce the criticality of preparing for retirement.
* Inflation is a reality, as are market downturns and emergency expenses, so include them in your planning assumptions.
* Under many circumstances, income is taxed. Factor that expense into building your retirement income stream.
* Start retirement preparations early (*or if you are already beyond 'early,' start now*)! Each of us will make constellations of decisions -- education, career choices, savings, investing, spending, borrowing, etc. -- that materially impact our *retirement readiness*.
* **Manage your risks** -- there are many.
* Too many avoid/ignore/delay preparing for this facet of their lives. Don't become (*or stay*) one of them.
(*I apologize up front about the length and inefficiencies in the discussion below. It is mostly a bunch of thoughts initiated by one or another question that emerged in discussions with coworkers or family during ~the last decade. Someday I will invest in some editing...*)
## Supporting Discussion
Regardless of your current age, all of us are getting older.
At some age many of us want to escape [hustle culture](https://www.nytimes.com/2019/01/26/business/against-hustle-culture-rise-and-grind-tgim.html?unlocked_article_code=1.Wk8.D7ER.E6z91jZdlM4H&smid=url-share) and [stop the *grind* of daily work](https://web.archive.org/web/20230302011326im_/https://assets.amuniversal.com/62ba9d609f6a012f2fe600163e41dd5b) to generate an income -- to [*retire*](https://en.wikipedia.org/wiki/Retirement). For any given individual, *retirement* may mean something different. For most of us it will be unrecognizable from commercials showing athletic *retirees* on sailing yachts, at beach mansions, in our newly-restored jazz club, or in our *retirement estate* for former racing dogs [*wealth porn*]. In the United States, though, entertaining our retirement ideas will require an income stream. [Note 1](#note_1) It seems prudent to think about your quality of life in retirement...before you retire. [*Don't do this*](https://web.archive.org/web/20160123215308im_/http://assets.amuniversal.com/740fbb90953901332f6c005056a9545d) (*or [here](https://web.archive.org/web/20230302071256/https://dilbert.com/strip/2016-01-23)*).
While it may not be central to your quality of life plans, reaching a certain level of financial readiness for retirement will influence that quality of life for most of us. Five key aspects of any retirement plan are [1] when, where and how much we invest/*save* (*which we **can** influence and can have a material influence on our retirement readiness*), [2] future rates of return on retirement assets and their timing (*which almost none of us can influence*), [3] future wage growth rates (*again, beyond our influence at a macro-level, but most of us **can** influence ours at an individual level*), [4] the timing and magnitude of future [inflation](https://en.wikipedia.org/wiki/Inflation) rates (*which almost none of us can influence*) and [5] how much we spend (*which we **can** influence and can also have a material influence on our retirement readiness*). There is also the issue of life expectancy at age 65 in the United States... As a whole, it appears that at 65 years old [men in the U.S. might expect to live another 17 or 18 years, and women slightly over 19 years](https://www.statista.com/statistics/266657/us-life-expectancy-for-men-aat-the-age-of-65-years-since-1960/) (also: [Note 7](#note_7)) -- but your overall [health, where you live, wages while working, race, ethnicity, your skin color, education and more](https://www.nytimes.com/2022/11/04/opinion/medicare-social-security-cuts-republicans.html?unlocked_article_code=1.Wk8.r6xL.17avYJQ3c9J0&smid=url-share) can materially influence those numbers. If you are lucky-enough and wise-enough to hit all the most positive characteristics, you might expect to live in the neighborhood of 30 years after 65 -- which could be a lot of years to fund.
Even if we [expected](https://www.newyorkfed.org/microeconomics/sce/labor#/expectations-retirement1), needed or wanted to continue *working* for income [*and roughly 20% of those over 65 do today*](https://ycharts.com/indicators/us_labor_force_participation_rate_age_65_and_over_unadjusted), many of us will suffer physical and/or cognitive decline in ways that will make doing so impractical.
For reference, in [July 2022 Gallup reported](https://news.gallup.com/poll/394943/retiring-planning-retire-later.aspx) that U.S. retirees on average, said that they retired at age 61, four years later than three decades earlier, and Pew Research Center reported that [as of the third quarter of 2021, 50.3% of U.S. adults 55 and older, 66.9% of 65- to 74-year-olds, and 86.7% of those 75-year-olds and older said they were out of the labor force due to retirement, according to a Pew analysis of the most recent official labor force data](https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pandemic-a-rising-share-of-older-u-s-adults-are-now-retired/). In 2020-2021 around 4,800 individuals in the U.S. retired every day (*one retirement every 18 seconds*).
More recently, the 2024 Employee Benefit Research Institute's Retirement Confidence Survey (EBRI RCS) found that "[retirees report they retired at a median age of 62](https://www.ebri.org/docs/default-source/rcs/2024-rcs/rcs_24-fs-2.pdf?sfvrsn=2647072f_1)." [They also wrote](https://www.ebri.org/docs/default-source/rcs/2024-rcs/rcs_24-fs-2.pdf?sfvrsn=2647072f_1) that 32% of retirees report that they retired by age 60 and another 38% say they retired between the ages of 60 and 64.
For almost all of us, preparing for retirement is an integral part of our work-life. If you have some employer-sponsored or employer-assisted retirement investing options, use them.
Traditional pension plans -- often called *defined contribution plans* -- are rare. These plans required employers to assume the investment risks required to pay retiree benefits. In the U.S. [employers are no longer willing to take on those risks](https://web.archive.org/web/20230307193137/https://dilbert.com/strip/1993-05-21). Traditional pension plans have been all but replaced by 401(k) plans (*and related 40x(x)* plans) -- which are often called *defined contribution plans*. Unlike traditional pensions, these plans will pay you nothing unless you invest in them. Essentially, the current U.S. retirement system is pushing working people to become investors and to assume all the associated risks.
Getting realistic and explicit about financing your retirement is a topic that is easy to neglect. Resist that heedless path. Also resist the force of negativity bias -- the tendency to exaggerate negative information -- and its resulting "[behavioral tendency to overweight a narrow range of possible future events in light of incoming information](https://www.ssa.gov/policy/docs/ssb/v81n4/v81n4p1.html)," even when it is misleading or otherwise inaccurate. Some behaviors may be generational - [Fidelity reported](https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/about-fidelity/FID-SORP-DataSheet.pdf) that 45% of NextGen "don't see a point in saving until things return to normal." Remain aware that there are many biases that can interfere with your retirement planning and supporting financial management behaviors -- see the list at: https://en.wikipedia.org/wiki/List_of_cognitive_biases
If you're thinking about preparing for retirement, assume that you will never have everything lined up or figured out perfectly before you start. Retirement planning guru [Wade Pfau has written](https://www.amazon.com/How-Much-Spend-Retirement-Investment-Based-ebook/dp/B076J4NBBZ/) that "Retirees have one opportunity to build a successful plan." (*I am confident Dr. Pfau did not mean this in its most literal reading...*) But I think that it is more practical to just start planning and acting on that plan **today**, than to attempt plan perfection before plan execution. Things change. Constantly. As is true for virtually any activity that requires you to invest over time, a *secret* to creating lasting momentum is to **start now** and **evolve over time**. Let time be your ally.
If you have not already done so, check the Social Security Administration's [Retirement Benefits Estimator](https://www.ssa.gov/benefits/retirement/estimator.html) to get an idea of what your *guaranteed* income stream may be -- or use their [Quick Calculator](https://www.ssa.gov/OACT/quickcalc/) for an estimate, and the same for a [spouse](https://www.ssa.gov/OACT/quickcalc/spouse.html). For most, it will not be enough to meet your wishes and you will need to cobble together additional means of retirement support over the course of your working life.
Health care also needs to be built into your planning. Medicare.gov has a lot of useful resources, including this summary of 2024 Medicare costs/expenses](https://www.medicare.gov/Pubs/pdf/11579-Medicare-Costs.pdf) and a tool to help get started finding [Medicare supplemental insurance](https://www.medicare.gov/plan-compare/#/?year=2024&lang=en).
### How do you prepare for retirement?
"[Money isn’t everything, but it’s something](https://www.cleveland.com/news/2023/06/things-you-wont-hear-at-most-graduation-commencement-speeches-terry-plutos-faith-you.html)."
Preparing for retirement is not a race to amass huge sums of liquid assets. It is about living your life. But for most of us, it requires an honest reckoning with our income needs and what we might have coming from Social Security. The Social Security Administration provides an easy-to-use tool to [estimate your retirement benefits at different ages and dates](https://www.ssa.gov/myaccount/retire-calc.html) so that you can understand the scale of that future cash flow. For context, as of Summer 2025, the [Social Security Administration reports](https://www.ssa.gov/news/press/factsheets/colafacts2025.pdf) that the average monthly Social Security retirement check in 2025 is $1,976, that if you retire at [age 62 in 2025, your maximum benefit would be $2,831](https://www.ssa.gov/faqs/en/questions/KA-01897.html) and that [the maximum possible benefit](https://faq.ssa.gov/en-us/Topic/article/KA-01897) at Full Retirement Age would be $4,018 (or $5,108 if you retire at age 70 in 2025). If you are lucky, there may also be some employment-related retirement payments, but counting on a traditional pension is [not an option for most of us](https://www.ssa.gov/policy/docs/ssb/v69n3/v69n3p1.html). Expect that you will need additional sources of income. Try to define what that means in dollars-per-unit-of-time (for example, *some number of dollars per month or per year*), and then begin assembling the means to generate that income stream.
When you retire can make a big difference in your monthly Social Security income (**2025** amounts):
| When | How much monthly | Calculated annual |
|:---------------|:----------------:|:-----------------:|
| Average Soc.Sec. check | $1,976 | $23,712 |
| Max. @ 62 yr.old | $2,831 | $33,972 |
| Max. @ Full Retirement Age | $4,018 | $48,216 |
| Max. @ 70 yr.old | $5,108 | $61,296 |
Social Security payments are based on the number of "*work units*" individuals accumulated throughout their lives and by age at retirement. For most of us, working at a tax-paying job throughout our adult life materially impacts the scale of our Social Security retirement payments.
If you have any type(s) of *employer match* components of a *defined contribution plan* use them. If possible, invest enough to get 100% of the *employer match*. Those *matching* dollars are a critically important component of your overall employment benefits. It is impossible to exaggerate their importance in your retirement preparations. If you do not have this type of employer benefit, you still need to prepare for the future. If you are still young, [10% is a commonly advised savings goal](https://www.nytimes.com/2022/07/08/business/bear-market-retirement-investment.html) and [15% is probably more appropriate for many](https://www.washingtonpost.com/business/2022/08/17/first-job-money-management/), but [the most important consideration is getting into the habit of saving](https://www.washingtonpost.com/business/2022/08/17/first-job-money-management/), so if you can't do 10% yet, start with 3% or 5% -- the critical thing is to start. In October 2022 the U.S. Dept. of Commerce Bureau of Economic Analysis reported that U.S. "[personal saving as a percentage of disposable personal
income was 2.3 percent](https://www.bea.gov/sites/default/files/2022-12/pi1022.pdf)" -- quite a bit lower than just six or eight months before. It appears that the 2022 level did not stick, and by 2024 and into 2025 [personal saving as a percentage of disposable personal income was around 4.5 percent](https://www.bea.gov/news/2025/personal-income-and-outlays-may-2025) -- still not enough to represent a national population preparing for long, *comfortable* retirements. Levels that low for the rate of savings increases the likelihood that too many are unlikely to be well prepared for retirement. If you find your savings at these levels or below, invest some time in thinking about how to reconfigure your income, spending and saving in ways that will drive your rate of saving up.
#### Formal Education Appears to Help
If you have the opportunity -- or if you can create the opportunity -- get a marketable college degree at an accredited non-profit college or university. (*Too many for-profit 'institutions of higher education' and 'trade schools' seem to engage in predatory business models. They seem like an unreasonable risk to me.*) Mid-2025 research from the New York Federal Reserve [supports this recommendation](https://libertystreeteconomics.newyorkfed.org/2025/05/the-college-economy-educational-differences-in-labor-market-outcomes/):
>"...the gap in employment rates between workers who have completed college and workers who have not is 12 percentage points—which is larger than the employment gaps between workers of different races/ethnicities or between men and women—and is wider than the pre-pandemic gap."
[Research by the U.S. Federal Reserve has shown repeatedly that](https://www.federalreserve.gov/publications/files/scf20.pdf):
>"Income also shows a strong positive association with education; in particular, income among families in which the reference person (i.e., *head of household*) has a college degree tends to be substantially higher than for those with less schooling. Mean income among college-educated families in the 2019 SCF was more than twice that of families in any other education group."
For example, the impacts in real dollars can be seen in the 1st quarter 2025 U.S. Department of Labor ["Usual Weekly Earnings Summary of Wage and Salary Workers" reported](https://www.bls.gov/news.release/wkyeng.nr0.htm):
>"full-time workers age 25 and over without a high school diploma had median weekly earnings of $743, high school graduates (no college) had earnings of $953, and those holding at least a bachelor's degree had earnings of $1,754. Among college graduates with advanced degrees (master's, professional, and doctoral degrees), the highest earning 10 percent of male workers made $5,079 or more per week, and their female counterparts made $3,528 or more."
[Jack Caporal](https://www.linkedin.com/in/jack-caporal) reported in June 2025 on "[the average retirement savings by age, income, level of education, and race](https://www.fool.com/research/average-retirement-savings/#toc_retirement-savings-by-education)."
>Educational attainment has a dramatic impact on retirement savings. The median retirement account value for someone with no high school diploma was $50,000 in 2022, nearly $100,000 less than someone with a college degree. The impact of educational attainment on retirement savings has become more pronounced over the past 30 years. In 1989, Americans with a college degree had saved about $16,000 more than those with no high school diploma, who had saved $23,056 in the median. By 2022, the median retirement account value of Americans without a high school diploma had roughly doubled. Meanwhile, the average retirement savings of those with a college degree more than tripled.
Similarly, [Auerbach, Kotlikoff and Koehler](https://kotlikoff.net/wp-content/uploads/2022/07/U.S.-Inequality-and-Fiscal-Progessivity-JPE-7-5-22.pdf) report in July 2022 that:
>studies by Goldin and Katz (2008) and Acemoglu and Autor (2011) show a steady and dramatic 75 percent increase in the college/high school wage premium over the last three decades, with typical college graduate wages now double that of high school graduates.
Research from MDRC [reported in April 2023](https://www.mdrc.org/publication/degrees-dollars) that graduation from a community college can deliver material economic advantage.
>"A new study of CUNY's Accelerated Study in Associate Programs (ASAP) shows it increased the earnings of students who participated in the program by 11 percent." [Victoria (Torie) Ludwin, Arnold Ventures](https://www.arnoldventures.org/stories/from-degrees-to-dollars-the-student-success-program-that-boosts-both-earnings-and-graduation-rates)
The relatively dramatic differences in income can make a huge difference over the 40 or more years that many of us will work and positively influence one's ability to prepare for retirement. Take a look at the macro view of wealth and educational attainment from the Federal Reserve](https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:0;series:Net%20worth;demographic:education;population:all;units:shares;range:1989.3,2025.1). While these facts about income and educational attainment may not be indicators of causation, [educational inequality](https://www.nber.org/system/files/working_papers/w29979/w29979.pdf) is real, and your zip code at birth is still a strong indicator of future earnings and asset accumulation. But earning a college degree still has material value [for many](https://cewgeorgetown.wpenginepowered.com/wp-content/uploads/cew-college_payoff_2021-fr.pdf) and [can open opportunities that are virtually closed to those without](https://www.nytimes.com/2023/04/26/opinion/value-college-degree-higher-education.html). (*Caution: All college degrees do not supply the same likelihood of lifetime financial advantage. [Race, gender, and more can influence](https://cewgeorgetown.wpenginepowered.com/wp-content/uploads/cew-college_payoff_2021-fr.pdf) the nature of any individual's "*return on education*"). For many, a degree in an esoteric field in the humanities is less likely to support a strong retirement savings plan than would a degree in computer engineering, economics, or chemistry, etc.*). [Colleges vary along many dimensions](https://www.nytimes.com/2023/03/27/opinion/problem-college-rankings.html), and it is important to manage your college costs and expectations, and to think through your college goals. The U.S. Department of Labor's Bureau of Labor Statistics has some extensive and useful datasets that can help illustrate the differences in income that are measured for a long list of occupations (*the differences between the wages paid to Fast Food and Counter Workers or Fast Food Cooks and Registered Nurses, Occupational Therapists or Information Security Analysts is vast -- the BLS says an average of more than $3,000,000 over 40 years*). See the [Occupational Employment and Wage Statistics (OEWS) Tables](https://www.bls.gov/oes/tables.htm#00-0000) home page to begin researching that data.
You can explore some of the relationships between race, education and more on your retirement income using the U.S. Census interactive tool: "[What Sources of Income Do People Rely On?](https://www.census.gov/library/visualizations/interactive/income-sources.html)." Social Security payments make up a materially smaller portion of individual's retirement income as their early in life education attainment increases -- suggesting that those with higher levels of education have accumulated more financial resources than have those with less by the time they retire.
In their book "[Deaths of Despair and the Future of Capitalism](https://press.princeton.edu/books/hardcover/9780691190785/deaths-of-despair-and-the-future-of-capitalism)" and in subsequent research [Anne Case](https://en.wikipedia.org/wiki/Anne_Case) and [Angus Deaton](https://en.wikipedia.org/wiki/Angus_Deaton) argue that there are also a range of non-economic severely negative consequences of acquiring *less* rather than *more* formal education:
>"Over the last decade, mean income rose in the US while life expectancy fell for three years prior to the arrival of COVID-19, and fell further during the pandemic. The typical household in the US has often done much worse than typical households in other wealthy countries. Those with a college degree are a minority of the US population. Life expectancy for Americans with at least a BA looks like life expectancy for the best performing countries in the world, while the US is the only case where life expectancy is falling for the less-educated group. Within the US, the gap in adult life expectancy between those with and without a BA rose from 2.6 years in 1992 to 6.3 years in 2019, the eve of the pandemic, with a further rise to 8.5 years in 2021. The causes of “deaths of despair” were and are more common among those without a four-year college degree, with mortality differences between the education groups ever increasing."
Their research and analysis about quality-of-life related to educational attainment suggests another reason (*far from simple "retirement planning"*) to keep higher education in focus when thinking about your future.
#### Building a Plan Helps
The literature seems to suggest that establishing and periodically grooming a plan with the assistance of a formal [finanical advisor](https://www.letsmakeaplan.org/find-a-cfp-professional) works best. Also, pick a target age for retirement to use in calculations that will test the viability of that plan over time.
And start as early as you can so that [*the magic of compounding*](https://www.explainxkcd.com/wiki/index.php/947:_Investing) has enough time to come to your aid -- while remembering that:
* Some key aspects of any retirement plan are future rates of return on retirement assets, future wage/income growth rates, inflation as well as your current and expected spending behavior (*including healthcare spending, which has been growing faster than inflation -- for example, a 2023 [Fidelity report](https://newsroom.fidelity.com/pressreleases/fidelity--releases-2023-retiree-health-care-cost-estimate--for-the-first-time-in-nearly-a-decade--re/s/b826bf3a-29dc-477c-ad65-3ede88606d1c) said that "65-year-old retiring this year can expect to spend an average of $157,500 in health care and medical expenses throughout retirement"*). Macro-trends and behaviors as well as the nature of your immediate situation make forecasting these variables problematic. Regardless, you, and likely, some trusted financial resource will need to make predictions about them as foundational inputs to an analysis of your retirement plan and retirement readiness.
* So, what does this mean for how much you will pay for things in the future? The [U.S. Bureau of Economic Analysis](https://www.bea.gov/) maintains data on how much Americans spend each month on a broad spectrum of goods and services. [Here is just one example for the 2020 -- 2025 period](https://apps.bea.gov/iTable/?reqid=19&step=3&isuri=1&select_all_years=0&nipa_table_list=2016&series=m&first_year=2020&last_year=2025&scale=-99&categories=underlying&thetable=), but you can request views of the data many different ways.
* Remember that another way to view inflation is that the dollars you save today will likely not be [worth as much](https://www.bls.gov/data/inflation_calculator.htm) at any given point in the future -- *adding pressure to save and invest early and often*.
* Future gains are not guaranteed -- this is true for all types of investing. Securities and markets go up **AND** they go down (*i.e., increase and decrease in value -- here are a couple illustrations of how average [401(k)](https://www.investors.com/wp-content/uploads/2022/08/wPerFin401k082222-1024x579.jpg) and [IRA](https://www.investors.com/wp-content/uploads/2022/08/wPerFinIRA082222-1024x578.jpg) account values have trended up, with some significant downturns over time.*). How long? I was introduced to investing as a student in the 1970s -- a [bear market](https://en.wikipedia.org/wiki/List_of_stock_market_crashes_and_bear_markets) began in January 1973 and markets did not return to those Jan '73 prices again until July 1980, more than 7 years later. That said, if you purchased the market in October 1974, held that and sold it in July 1980, you may have experienced a more than 45% capital gain. A *similar* period occurred between March 2000 and May 2007.
In their [2025 Modern Wealth Survey](https://content.schwab.com/web/retail/public/about-schwab/schwab-modern-wealth-survey-2025-findings.pdf), Schwab researchers found that only 31% of Americans have "determined [their] financial goals and have documented them in a formal plan." (*39% of Gen Z, 36% of Millennials, 27% of Gen X, and 26% of Boomers*) Experience has shown that a plan can help many achieve their financial goals -- including funding your retirement -- so, build and document your plan, and then periodically review and *groom* it.
#### Material Downturns Occur Regularly
Below are S&P Bear Markets since 1973 (*as a proxy for the entire market*):
|Description | Period |Percent decline|Months of decline|Months of recovery|
|:-----------------|-----------------------------------|:-------:|:-----------:|:------------:|
|1973 Conflict in the Middle East|11 Jan. 1973--17 Jul. 1980|-48% |21 |70 |
|1980 Stagflation |28 Nov. 1980--03 Nov. 1982|-27%|20 |3 |
|1987 Black Monday |25 Aug. 1987--26 Jul. 1989|-34%|3 |20 |
|1990 Gulf War |16 Jul. 1990--13 Feb. 1991|-20%|3 |4 |
|2000 Tech Market Madness followed by War-In-Iraq Madness |24 Mar. 2000--30 May 2007|-49%|31 |56 |
|2007 Mortgage Madness & Real Estate-Backed Securities Crash|09 Oct. 2007--28 Mar. 2013|-56%|17 |49 |
|2018 Fear/Profit taking (*almost bear*)|20 Sep. 2018--23 Apr. 2019|-19.8%|3 |4 |
|2020 COVID-19 Pandemic Shock|19 Feb. 2020--Aug. 2020|-34%|1 |5 |
|2022 Pandemic *Supply Chain* and *vendor greed* Crisis|3 Jan. 2022--Jun. 2023|-25%|10 |8 |
Investing in stocks and equity index or mutual funds will require you tolerate some volatility. While even the best financial advisor will take [reasonable care](https://www.ecfr.gov/current/title-17/chapter-II/part-240/subject-group-ECFR64f52d737aea1ed/section-240.15l-1) in developing and making recommendations, investing in securities involves risk, and you may lose money. In extreme cases losses may include your entire investment capital -- *but a foundational component of your planning involves building a savings/investment portfolio that **resists** extreme loss*. At any given point in time, historical patterns are not always useful as illustrations of future trends. This issue is especially true for shorter timelines. Approach risk-taking seriously.
* Measured risk may be an to your advantage in many contexts. Storing *investment* money in savings accounts -- or even worse, in your home -- is not a *safe* **investment strategy** because of the likelihood of [loss to inflation](https://www.bls.gov/data/inflation_calculator.htm).
* Inflation is a material retirement planning consideration. Imagine what retiring in periods like [2021 (*4.7% inflation rate*) or 2022 (*8.2% inflation rate in August*)](https://en.wikipedia.org/wiki/2021%E2%80%932022_inflation_surge) might mean to your ability to fund your needs over the subsequent two or three decades. Make conscious assumptions about inflation as you set retirement savings goals. And ensure that any model(s) you or your financial advisor incorporate those assumptions about inflation (*not just some optimistic default value -- and if your retirement-planning/readiness calculator does not permit customizing inflation assumptions, get another calculator*).
* Your behaviors can exaggerate the influence of securities price/value changes. For example, selling at the bottom or buying at the peak prices can *lock in* losses. (*I have personal experience with both and have learned that for me well-trained, experienced and mature advice helps me make better investing decisions*.)
* It is also possible to take advantage of the influence of securities price/value changes. [Jeff Sommer](https://twitter.com/jeffsommer), New York Times columnist on markets, finance and the economy wrote useful essays on how -- *as part of a program of [dollar-cost-averaging](https://www.finra.org/investors/insights/dollar-cost-averaging)* -- [investing during bear markets](https://www.nytimes.com/2022/07/08/business/bear-market-retirement-investment.html) and [recessions](https://www.nytimes.com/2022/07/14/business/investing-inflation-recession.html) **may** bring enhanced rewards. A simplistic version of this idea involves [buying the whole market via an index fund (*low-cost, no-frills*) and holding on to those investments](https://www.nytimes.com/2022/08/26/business/stock-market-bear-nothing.html). *[Again, remember that markets go down and up. S&P 500 went down 20% and Nasdaq Composite Index fell 33.9% in 2022*. And as I write this sentence on 01 Aug. 2024 the S&P500 went up 22% and the Nasdaq Composite Index went up 26% in the last 12 months...](https://www.nytimes.com/section/markets-overview).*
* Tie your wealth-building to [money](https://www.nytimes.com/2021/12/10/opinion/cash-crypto-trust-money.html). There are opportunities to buy *things* that have little probability of useful future value -- and that seems unrelated to *investing for the future*. *Money* in this context is an instrument that functions as a broadly agreed upon medium of exchange, and that role is socially determined. Think: "*I will accept just about anything from you as payment if I trust that the next person in the chain will accept it from me*." For most, building wealth for retirement requires a long time, so *investment* fads that have a limited life-cycle can sap your ability to meet your retirement goals.[NOTE 2](#note_2)
* Accumulating *money* is a common approach to retirement planning, but there are alternative paths that work for some. Real-estate, farming and business ownership are a few well-established ways that some accumulate family wealth that can generate a (*sometimes*) predictable retirement income stream. These paths are not for everyone and also require relatively sustained engagement (long-timelines) in the context of preparing for retirement. I am not competent to explore how any of these three options might present unique issues and opportunities in the context of actions tightly coupled to retirement planning.
* These alternatives involve risks as well. There are too many theives and grifters in the *business* of getting you started in business. Use caution when entertaining investments in sales-centric "multi-level" or "pyramid" opportunities -- better, just avoid/reject them altogether. See: [False Profits: Seeking Financial and Spiritual Deliverance in Multi-Level Marketing and Pyramid Schemes](https://www.amazon.com/False-Profits-Financial-Deliverance-Multi-Level-ebook/dp/B0078W0U2G/ref=sr_1_2?crid=3OGFDJ27KTRXV&keywords=robert+fitzpatrick&qid=1674429716&sprefix=robert+fitpatrick%2Caps%2C142&sr=8-2) by Joyce K. Reynolds and Robert L. FitzPatrick for more information on these categories of businesses.
* Because there are always too many self-absorbed (*cruel*) financial *advisors*/*coaches* and grifters who want to take *your* money, finding a qualified and trustworthy financial advisor that is the right *fit* for you remains a challenge (*[in 2024 there was some hope of legislation to help](https://www.nytimes.com/2024/03/26/business/fiduciary-rule-retirement.html), but in the current U.S. governing/regulating environment avoiding advisor-grifters will likely only get harder for a while*). [see: NOTE 3](#note_3)
* Build your plan to account for some level of cognitive impairment in the future. At some point, many (*if not most*) of us will be unable to actively manage our finances in risk-appropriate ways. Therefore it seems prudent to build in retirement financing guardrails that will resist scammers/scams, computer and Internet vulnerabilities, and ever-present financial fraud and abuse.
### Remain Sufficiently Informed
* See: "Ten Things to Consider Before You Make Investing Decisions." from the U.S. SEC's Office of Investor Education and Advocacy [https://www.sec.gov/investor/pubs/tenthingstoconsider.htm](https://www.sec.gov/investor/pubs/tenthingstoconsider.htm)
* Check every *financial advisor* candidate to ensure they are trained and licensed:
* Investment Adviser Public Disclosure website [https://adviserinfo.sec.gov/](https://adviserinfo.sec.gov/)
* Investor Alerts and Bulletins [https://www.sec.gov/investor/alerts](https://www.sec.gov/investor/alerts)
* FINRA’s BrokerCheck [https://brokercheck.finra.org](https://brokercheck.finra.org)
* Or to find the relevant regulator(s) in your state try the North American Securities Administrators Association (NASAA) at [https://www.nasaa.org/contact-your-regulator/](https://www.nasaa.org/contact-your-regulator/) for resources and contact information for state and provincial securities regulators and related resources those agencies provide.
* Familiarize yourself with signs of a grifter/con-artist [https://www.businessinsider.com/7-tell-tale-signs-of-a-con-artist-2016-3](https://www.businessinsider.com/7-tell-tale-signs-of-a-con-artist-2016-3). Even the smallest, subtle hints or whiffs of these behaviors should be taken very seriously. Keep your sensors tuned and trust your gut if you think you may have hooked up with an advisor who does not have your best interest in the foreground and follow up by monitoring and reviewing all account transactions to confirm **you** are being treated ethically.
* **Don't casually transfer your retirement money into a financial advisor's control** (or simply to where they *earn* commissions) without reading and thinking about "Questions You Should Consider Asking Before You Initiate Your Account Transfer." [https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-79](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-79)
* Think about where *your* money is going -- and make *informed-enough* decisions about it:
* Each of us has a more or less defined *[risk appetite](https://en.wikipedia.org/wiki/Risk_appetite#Definition)*, and individual investment opportunities (*as well as classes of investments*) exist somewhere on a *[risk continuum](https://www.answers.com/management/What_is_a_risk_continuum)* (Low risk<------------------------------>Extreme risk). A common definition of the term "risk appetite" in this context involves "[the willingness of investors to bear financial risk with the expectation of generating a potential profit](https://www.ecb.europa.eu/pub/pdf/fsr/art/ecb.fsrart200706_04.en.pdf)." Most financial advisors will attempt to help you define your [risk appetite](https://www.investopedia.com/terms/r/risk.asp) and then may construct a portfolio of investment options of varying risk characteristics (*which will be a facet of that portfolio's diversification*) aligned with your risk appetite.
* Invest with your conscience fully engaged. There may be types of businesses that are not aligned with your values -- and as a result may not be appropriate for your investment portfolio. We are exploring how you invest **your** money -- so don't simply accept investment recommendations because they come from an *expert*, help your financial advisor understand the types of investments that are not aligned with your values.
* Although "[ESG](https://en.wikipedia.org/wiki/Environmental,_social_and_corporate_governance)" scores and comparisons are imperfect, they *may be* helpful, they *may* provide useful context.
* There are screeners available to check the environmental, social and governance (ESG) risk of your investments. One example is: [https://yoursri.com/services/services/free-services/search-compare](https://yoursri.com/services/services/free-services/search-compare)
* Some investments remain opaque. It may require some effort to understand which industries and/or countries your investments support. For example: "Investor Bulletin: U.S.-Listed Companies Operating Chinese Businesses Through a VIE Structure." Sept. 20, 2021 [https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-95](https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-95). If is seems impossible or impractical to learn about the details of a given investment then it may not fit the risk profile incorporated into your retirement financial plan.
### Challenges Are Real -- Get Started Anyway
I understand that not everyone on this journey starts in equal circumstances. The [Social Security Administration](https://www.ssa.gov/oact/cola/central.html) (*SSA*) put the average U.S. annual net wage in 2020 at $53,383, and the median net wage at $34,612. That compares with the Labor Department's Bureau of Labor Statistics (*BLS*) release in May 2020 saying that [median annual gross wage earnings across all occupations](https://www.bls.gov/oes/current/oes_nat.htm#00-0000) was $56,310. *See the table below for updates since 2020.* That suggests that many are not earning enough to make saving *easy*.
| Reporter | Average Annual | Median Annual |
|:---------|:--------------:|:-----------:|
| 2025 SSA | Not Avail. | Not Avail. |
| 2025 BLS | Not Avail. | Not Avail. |
| 2024 SSA | $69,846 | Not Avail. |
| 2024 BLS | $67,920 | $49,500 |
| 2023 SSA | $63,932 | $43,222 |
| 2023 BLS | $65,470 | $48,068 |
| 2022 SSA | $61,220 | $40,847 |
| 2022 BLS | $61,900 | $46,300 |
| 2021 SSA | $58,129 | $37,586 |
| 2021 BLS | $58,260 | $45,760 |
Sources: [Average and Median Amounts of Net Compensation](https://www.ssa.gov/oact/cola/central.html) and [Occupational Employment and Wage Statistics (OEWS) Tables](https://www.bls.gov/oes/tables.htm#00-0000) sanity checked against U.S. Census data: [Income in the United States: 2023](https://www.census.gov/library/publications/2024/demo/p60-282.html) and [Wealth of Households: 2022](https://www.census.gov/library/publications/2024/demo/p70br-202.html). The 2024 SSA average value is from the [SSA COLA AWI Series](https://www.ssa.gov/oact/cola/awiseries.html) and will be updated when/if the SSA updates the [Average and Median Amounts of Net Compensation](https://www.ssa.gov/oact/cola/central.html) numbers for 2024 (*still not available, 1 Nov 2025*).
Assembling a diverse portfolio requires resources.
Gender plays a material role in earnings in the U.S. In late 2021 U.S. Department of Labor [outlined](https://www.bls.gov/news.release/wkyeng.t03.htm) gender impacts in detail. They [summarized](https://www.bls.gov/news.release/wkyeng.nr0.htm) that data with: "Men's and women's earnings were closer among younger workers than older workers; for example, women ages 16 to 24 earned 94.1 percent as much as men in the same age group, while the women's-to-men's earnings ratio was 76.9 percent for those age 55 and over."
In addition, non-whites in the U.S. face systemic economic pressures that are material to any discussion about retirement planning. 4th quarter 2021 U.S. Department of Labor [reported](https://www.bls.gov/news.release/wkyeng.nr0.htm) that "median weekly earnings of Blacks ($805) and Hispanics ($799) working full-time jobs were lower than those of Whites ($1,030) and Asians ($1,384)." Those differences impact wealth accumulation. The Federal Reserve maintains a [macro view of wealth distribution by race over time](https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:0;series:Net%20worth;demographic:race;population:1,3,5,7;units:levels;range:1989.3,2025.1). In 2019 The Federal Reserve published a paper outlining [disparities in wealth by race and ethnicity](https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.htm) -- showing that there are sizeable differences in wealth by race and ethnicity, most starkly between young Black and young White families:
```
The median young Black family has almost no wealth ($600).
In contrast, the median young White family has a wealth of $25,400.
Young Hispanic and other families fall in between,
with $11,200 and $13,500 in median wealth, respectively.
```
[Jack Caporal](https://www.linkedin.com/in/jack-caporal) reported in June 2025 on "[average retirement savings by race](https://www.fool.com/research/average-retirement-savings/#toc_retirement-savings-by-race):":
>It’s well-documented that race can play a decisive factor in income and other measures of financial well-being. That's true when it comes to retirement savings as well. White Americans had a median average retirement account value of $100,000 in 2022 -- $61,000 more than Black Americans and $46,600 more than Hispanic Americans. Similar to the impact educational attainment has on retirement savings, the median value of retirement savings for white Americans has grown faster than Black and Hispanic Americans since 1989.
[Julie Zauzmer Weil added some context](https://wapo.st/4eW9WWq) (*in the Washington Post*) about how slavery and [slave owning in the United States](https://wapo.st/40kqHo6) played a foundational role in how "African Americans to this day lack the intergenerational wealth of White Americans. The typical Black household’s wealth is less than a tenth that of the typical White household."
There are other systemic, race-relevant wealth-accumulation issues as well. [Research from the St. Louis Fed.](https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions) documented that many single mothers have very low levels of financial reserves. "Among singles (i.e., those who have never married, are divorced, widowed or separated) in 2019, mothers of minor children had the lowest levels of median wealth by far, with [only about $7,000 in family wealth](https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions)."
>Wealth is important for housing and food security, and financial well-being more generally, though it varies considerably by race and ethnicity. Single white mothers had $46,000 in median wealth in 2019, whereas single Black and Hispanic/Latina mothers had about $4,000. Single white mothers thus had about 11 times more median wealth, affording them a more comfortable cushion when dealing with unanticipated events like the pandemic. In 2020, Black and Hispanic/Latina women (ages 25-54) were more likely to be single mothers of children ages 0-17 than were white women; the likelihood of being such a mother was 26%, 19% and 11%, respectively.
[https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions](https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions)
Changing that racial disparity, which is real and is a slice of broader long-running racism, is critically important, but is beyond the scope of this argument. If you are interested in more material on this topic, it might be useful to start at Wikipedia's "[Racism against African Americans](https://en.wikipedia.org/wiki/Racism_against_African_Americans)" page, or more generally at their "[Racism in the United States](https://en.wikipedia.org/wiki/Racism_in_the_United_States)" page.
A [recent Federal Reserve paper](https://www.federalreserve.gov/econres/feds/files/2018080pap.pdf) documented that a very different constellation of circumstances is associated with "[millennials](https://github.com/mccright/rand-notes/blob/master/Generations-Defined.md) own(ing) fewer assets than members of earlier generations" when they were young, with lower earnings, fewer assets, and less wealth.
The most recent [Federal Reserve data](https://www.federalreserve.gov/econres/scfindex.htm) says that only 54.5 percent of Americans ages 55 to 64 have retirement accounts.
If you find yourself a decade or more behind your peers -- or if you just fear it -- the foundational rule is to get started on a path to some type, some level of *retirement readiness.*
At times throughout my adult life I have listened to peers romanticizing the lives of *the poor*, sometimes in the context of describing their expectations in *old age*. If you **ever** find yourself doing the same, **stop**. Living in the United States of America without having *enough money* is hard! Our systems are built around -- among other critical dimensions -- social and economic thresholds that introduce additional tasks (*work*) and expenses (*"taxes" by other names*) for the survival of those considered "*poor*." Being *poor* in the U.S. is exhausting, punishing, and demoralizing -- and "*just being poor*" is an unsuitable **retirement goal** for anyone who has the potential current means to do otherwise.
Regardless of the scale of your available resources, the most important short term priority is to start building wealth. How much wealth? That will vary, but for a few decades a commonly-repeated target was "you need 25-times your pre-tax income portfolio goal when you retire" ([*here quoted from David M. Blanchett, Ph.D., CFA, CFP®, and more*](https://www.advisorperspectives.com/articles/2021/02/25/retirement-planning-in-the-post-4-world)), which I believe for most can safely be simplified to "your retirement investment portfolio should be 25 times the size of your annual income at retirement." For most of us that can seem like a challenge, but try to remain engaged in your efforts to prepare for your retirement -- don't freeze up. Research your options -- there are lots of on-line resources. A very quick, crude, retirement savings calculator is available at: [https://www.cnn.com/business/calculators/retirement-calculator](https://www.cnn.com/business/calculators/retirement-calculator). Make decision after decision. Take the next step, and the next. Here is an example of what 20 and 25-times some sample annual incomes looks like:
|Annual Income| Times 20 | Times 25|
|:-----------:|:--------:|:-------:|
|$20,000 | $400,000 | $500,000 |
|$30,000 | $600,000 | $750,000 |
|$40,000 | $800,000 | $1,000,000|
|$50,000 | $1,000,000 | $1,250,000|
|$60,000 | $1,200,000 | $1,500,000|
|$70,000 | $1,400,000 | $1,750,000|
|$80,000 | $1,600,000 | $2,000,000|
|$90,000 | $1,800,000 | $2,250,000|
|$100,000 | $2,000,000 | $2,500,000|
|$110,000 | $2,200,000 | $2,750,000|
|$120,000 | $2,400,000 | $3,000,000|
|$130,000 | $2,600,000 | $3,250,000|
|$140,000 | $2,800,000 | $3,500,000|
|$150,000 | $3,000,000 | $3,750,000|
>[*I have seen opinion pieces and research papers that replace the "Annual Income" I used above, with "Annual Spending." There may be material distance between these two values. "Annual Spending" **may** be a more appropriate value for some. Use which ever seems most appropriate for your situation.*]
[The Humble Dollar](https://humbledollar.com) has what seems like an excellent response to the question "[How Much to Retire?](https://humbledollar.com/money-guide/how-much-to-retire/):"
>"ANSWERING THIS question is surprisingly easy. Start by figuring out how much pretax income you want each year in retirement. Next, subtract what you expect to receive from Social Security and any employer pension plan. Whatever amount that leaves—let’s say it’s $40,000 a year -- will need to come from your savings. You multiply that $40,000 by 25 and you have your answer: $1 million."
The [article](https://humbledollar.com/money-guide/how-much-to-retire/) goes on to provide context for that equation and is worth a read.
>[For context: according to the [Schwab Modern Wealth Survey June 2023](https://www.aboutschwab.com/schwab-modern-wealth-survey-2023), the average American says being rich means having a net worth of $2.2 million -- the same number as in their [2022 research](https://content.schwab.com/web/retail/public/about-schwab/schwab_modern_wealth_survey_2022_findings.pdf)]. *...read on*
The Schwab [2024](https://www.aboutschwab.com/schwab-modern-wealth-survey-2024) and [2025](https://www.aboutschwab.com/schwab-modern-wealth-survey-2025) Surveys found that it took $2.5M and $2.4M "to be considered wealthy." (To be fair, Schwab broke down that feeling of "wealthy" into a range of components: Happiness, Amount of money I have, Physical health, Mental health, Quality of my relationships, Life experiences, Accomplishments, Amount of free time and Material possessions. Which seems like a healthier way to look at wealth than simply "money." But this is a discussion about generating income during retirement -- which for most of us means "money" or another income-generating asset in one form or another.
The [2024 Planning & Progress Study](https://news.northwesternmutual.com/planning-and-progress-study-2024), an annual research study from Northwestern Mutual (*a company that sells retirement-related services and investments*) reported that:
>Americans’ “magic number” for retirement is surging to an all-time high – rising much faster than the rate of inflation while swelling more than 50% since the onset of the pandemic. U.S. adults believe they will need $1.46 million to retire comfortably, a 15% increase over the $1.27 million reported last year, far outpacing today’s inflation rate which currently hovers between 2% and 3%. Over a five-year span, people’s ‘magic number’ has jumped a whopping 53% from the $951,000 target Americans reported in 2020.
>By generation, both Gen Z and Millennials expect to need more than $1.6 million to retire comfortably. High-net-worth individuals – people with more than $1 million in investable assets – say they’ll need nearly $4 million.
>Meanwhile, the average amount that U.S. adults have saved for retirement dropped modestly from $89,300 in 2023 to $88,400 today, but is more than $10,000 off its five-year peak of $98,800 in 2021.
Again, these numbers can seem like a challenge in isolation. But for many who reach them, they are the result of regular *saving* and *investing* for retirement and full participation in employer plans over many years. One of the keys is to start and stick with a plan.
*There is some material disagreement about this 20x to 25x target -- the approach outlined above may not be right for everyone. See the ["Are You Saving Enough For Retirement? At this household income:"](https://www.investors.com/etfs-and-funds/retirement/you-need-this-much-retirement-savings-at-your-age-and-income/) table in [this article](https://www.investors.com/etfs-and-funds/retirement/you-need-this-much-retirement-savings-at-your-age-and-income/) by Paul Katzeff for an alternative idea -- one that I believe materially increases one's longevity, uncertain (*medical or other*) material expenses in old age, and market timing risks.* Fidelity mirrors some of Mr. Katzeff's ideas when they argue for a goal of "[saving 10x (times) your preretirement income by age 67](https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire)." Fidelity argues that it is helpful to target "age-based milestones." "[Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67](https://www.fidelity.com/viewpoints/retirement/how-much-do-i-need-to-retire#:~:text=Fidelity's%20guideline%3A%20Aim%20to%20save,lifestyle%20you%20hope%20to%20have%20in%20retirement.)". Roger Young, CFP, Thought Leadership Director, T. Rowe Price, [recently wrote](https://www.troweprice.com/personal-investing/resources/insights/how-to-determine-amount-of-income-you-will-need-at-retirement.html) that "we recommend that most people consider a target between seven and 13½ times their ending salary," depending "on your income and marital status." As a result, I've added another table below that includes examples of what 10 and 15-times some sample annual incomes look like (*understanding that less retirement savings means, for most, increased risks*):
|Annual Income|Times 10|Times 15|Times 20|Times 25|
|:-----------:|:------:|:------:|:------:|:------:|
|$20,000 | $200,000 | $300,000 | $400,000 | $500,000|
|$30,000 | $300,000 | $450,000 | $600,000 | $750,000|
|$40,000 | $400,000 | $600,000 | $800,000 | $1,000,000|
|$50,000 | $500,000 | $750,000 | $1,000,000 | $1,250,000|
|$60,000 | $600,000 | $900,000 | $1,200,000 | $1,500,000|
|$70,000 | $700,000 | $1,050,000 | $1,400,000 | $1,750,000|
|$80,000 | $800,000 | $1,200,000 | $1,600,000 | $2,000,000|
|$90,000 | $900,000 | $1,350,000 | $1,800,000 | $2,250,000|
|$100,000 | $1,000,000 | $1,500,000 | $2,000,000 | $2,500,000|
|$110,000 | $1,100,000 | $1,650,000 | $2,200,000 | $2,750,000|
|$120,000 | $1,200,000 | $1,800,000 | $2,400,000 | $3,000,000|
|$130,000 | $1,300,000 | $1,950,000 | $2,600,000 | $3,250,000|
|$140,000 | $1,400,000 | $2,100,000 | $2,800,000 | $3,500,000|
|$150,000 | $1,500,000 | $2,250,000 | $3,000,000 | $3,750,000|
For many, a material component of your retirement readiness equation is your spending behaviors. As of Q2 2025 America's household debt is around a staggering [$18.39 trillion](https://www.newyorkfed.org/microeconomics/hhdc.html). In October 2023, Cora Lewis (Associated Press) [reported](https://apnews.com/article/inflation-debt-poll-personal-finance-economy-dd4c88e2076d1fd3f85c51fb8992583b) that "about 2 in 3 Americans say their household expenses have risen over the last year, but only about 1 in 4 say their income has increased in the same period, according to a new poll from The Associated Press-NORC Center for Public Affairs Research." She added that "About 8 in 10 Americans say their overall household debt is higher or about the same as it was a year ago. About half say they currently have credit card debt, 4 in 10 are dealing with auto loans, and about 1 in 4 have medical debt. Just 15% say their household savings have increased over the last year." Inflation, debt and savings are key facets of individual and family money management.
Some are unable to get started on that savings journey. A [2024 AARP survey](https://press.aarp.org/2024-4-24-New-AARP-Survey-1-in-5-Americans-Ages-50-Have-No-Retirement-Savings) found that "20% of adults ages 50+ have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement."
The "*data*" on retirement savings varies materially. In May 2024 [Deposit Accounts](https://www.depositaccounts.com/blog/retirement-years-study.html) said that "The average retirement account savings for those ages 65 to 74 is $609,230."
After analyzing data from 4,588 online interviews, researchers published in the [2024 Planning & Progress Study](https://news.northwesternmutual.com/planning-and-progress-study-2024) that they found "there are large gaps between what people think they’ll need to retire and what they’ve saved to date:"
|Research Finding|All |Gen Z |Millennials |Gen X |Boomers+ |HNW ($1M+) |
|:--------------:|:------:|:------:|:------:|:------:|:------:|:------:|
|Amount saved for retirement currently|$88,400|$22,800|$62,600|$108,600|$120,300|$172,100|
|Gap between retirement goal and current savings|$1.37M|$1.61M|$1.59M|$1.45M|$870K|$3.76M|
Source: ["2024 Planning & Progress Study – Work, Retirement & Taxes"](https://filecache.mediaroom.com/mr5mr_nwmutual/179070/2024%20PP%20Wave%20II%20Data%20Deck_%20Work%20%20Retirement.pdf) page 5, downloaded 2024-04-03.
The $609,230. "average retirement account savings" from Deposit Accounts and the $120,300. "Amount saved for retirement currently" value from Northwestern Mutual -- both from 2024 -- seem improbably distant from one another, suggesting *bad* or misleading data or missing context. A truely representative median dollar figure is probably somewhere in between. Regardless, we still need to consider our goal -- preparing for retirement...
Based on survey results like those above and excellent overviews of the topic like "[5 Money Mistakes That Can Make the Road to Retirement Even Longer](https://www.nytimes.com/2025/07/27/business/retirement-saving-mistakes-401k.html?unlocked_article_code=1.Z08.UcJ1.nQZQdFfqxk1O&smid=url-share)" by Lisa Rabasca Roepe, it is clear that there are widespread circumstances that make *saving* and *investing* a material challenge. But some circumstances are of our own making -- which we can influence. There is no magic "*fix*" and be wary of anyone offering/selling one. For those who find themselves in the most economically constrained circumstances, income and spending are the primary *levers* available for *generating* future retirement funding.
There are many external forces (*for some these include material systemic forces*) that may inhibit your ability to increase your income. While reducing the negative impacts of those external forces and tamping down race/gender/identity descrimination are important missions, they do not replace the need to deal with the everyday individual and family financial preparations for retirement and/or "*old age*" -- which remain foundational for most of us.
On the spending side of this equation, the conventional advice is to be mindful, self-aware and alert. When building a budget or in the act of spending, ask yourself, "Am I doing the right thing?" This is especially true for your non-essential 'consumer' behaviors, or where for any given expense there are a range of options, of varying costs. For a lot of us, asset accumulation also meant deciding how **not** to spend our money (*[or at least initially, how to manage impulse spending](https://www.nytimes.com/interactive/2023/01/12/business/impulse-buying-control-tips.html)*). This does not have to involve negative self-denial. [Some argue](https://en.wikipedia.org/wiki/Simple_living) that *[voluntary simplicity](https://www.investopedia.com/terms/v/voluntary-simplicity.asp)* is the most approprate approach to *generating* investable assets, but there is **not** general agreement about its practicality for most.
If you can look at your own actions from the perspective of a third party who cares about meeting your retirement goals, you may be able to make consumption choices better aligned with your retirement *financial asset accumulation* goals.
Also, a number of wise peers have counseled me to remember that it's never too late to learn, and asking a question is often more important than *knowing* the answer. *[Thank you Pranav Doctor.](https://blog.avenuecode.com/ac-spotlight-pranava-doctor)*
There will be some uncertainty. It is not unusual to find your inner voice asking: "How did I end up here?" or "What am I doing with my investments?" or even "Why did I ever agree to this?" There is no magic for dealing with these issues. Talk with people you trust. Listen. Read. Take a class. Learn about your options for managing your money, saving and investing. And, as needed, adapt.
There are some useful tools and information at: SEC Investor.gov Publications and Research (includes financial tools and calculators) [https://www.investor.gov/introduction-investing/general-resources/publications-and-research](https://www.investor.gov/introduction-investing/general-resources/publications-and-research).
How do you know your plan is working? Identify and then start documenting some dimensions of that plan. Tracking Savings habits, credit card (or other high-interest) debt, auto debt, emergency savings [[Note 4](#note_4)], and *financial* asset portfolio size-and-risk might be useful measures for determining the succcess of your plan. [Bankrate](https://www.bankrate.com/) offers a useful "[3 tips on building your emergency fund amid a turbulent economy](https://www.bankrate.com/banking/savings/emergency-savings-report/#tips-on-building-your-emergency-fund)" to help anyone get started on their journey to building an emergency savings pool that fits their needs:
1. Figure out how much you need in emergency savings
2. Open a savings or money market account just for emergencies (*ensure that your funds will be available whenever you need it -- without excessive delays or fees*)
3. Make [*and use*] a budget around savings
And Michelle Singletary [writes about four types of savers](https://wapo.st/4fAIsWI) and offers suggestions for optimizing your emergency savings.
Think about and plan for how you will react to any changes in household income -- the New York Federal Reserve has publishes research results about [how Americans expect to allocate an increase or decrease in household income (*numbers below are for Apr 2025*)](https://www.newyorkfed.org/microeconomics/sce/household-spending#/expectations-spending-response1):
* Response to Income Gain: "Save or invest: 50.6%," "Pay down debts: 31.9%," and "Spend or donate: 17.5%."
* Response to Income Loss: "Reduce spending: 72.5%," "Reduce saving: 23.3%," and "Increase borrowing: 4.2%."
Your financial planner will take your information, run a set of [Monte-Carlo (or other) simulations](https://darrowwealthmanagement.com/blog/stress-testing-a-financial-plan/), and report on the probability of your plan and your behaviors against that plan, meeting goal(s) that define **your** successful financial outcome(s) at given ages in the future. Carefully review the assumptions that your financial planner used to build your reports! Ensure that you understand each and that you agree with those values -- change any to fit your assumptions and needs (*historically, it seems like too many of these tools start with overly optimistic assumptions about inflation and return on your investment portfolio -- pay special attention to these as you review the financial planner's analysis configuration*).
There are many *correct* answers to questions about that targeted '*age at retirement,*' beyond just achieving some financial goals. Dana G. Smith outlines a number of issues to consider on this topic in "[What Is the Ideal Retirement Age for Your Health?](https://www.nytimes.com/2023/04/03/well/live/retirement-age-health.html)." These include, but are not limited to, maintaining your cognitive health (*continued working may help some*), the nature of your worklife occupation (*some occupations can wear your body out earlier than others*), your life expectancy (*which incorporates your individual and family health history, race, gender and more*). Entering retirement '*too early*' can increase the probability of negative health outcomes. That said, it can also have the reverse -- Dr. Lisa Renzi-Hammond, director of the Institute of Gerontology at the University of Georgia said:
>"If you’re leaving a job that is physically bad for you, where you are getting terrible sleep and you’re constantly stressed out, then retirement is great for your health."
The materially shorter "*health span*" and life expectancy for Black men, for example, may result in less accumulation of retirement assets as well as recieving less retirement-associated income. Also, the "[toll chronic stress from discrimination takes on the body](https://www.nytimes.com/2023/04/03/well/live/retirement-age-health.html)" is known to [materially reduce working-life expectancy](https://www.npr.org/sections/health-shots/2023/03/28/1166404485/weathering-arline-geronimus-poverty-racism-stress-health). Both these issues are relevant to the ongoing wealth gap between Blacks, Native Peoples and Whites in United States.
When you approach or enter *retirement,* your willingness to assume risks in equity, commodity, or other markets may evaporate [[*this might be changing*](https://www.nytimes.com/2022/01/21/business/retirement-stocks-vanguard.html)]. It is a challenge, though, to generate an adequate income stream using only the safest of financial instruments (cash, or near-cash equivalents). ...And [bond funds don't deliver the level of predictability in their returns (*that some are used to*)](https://www.deshaw.com/research/market-insight-revisiting-stock-bond-correlation). Safety does not seem to pay today [[Note 5](#note_5)] -- you may receive less than one half of one percent interest in your local bank, especially if you use one of the five biggest U.S. banks. As a reality check, you can easily review how much *annual income* a given pile of financial assets can reliably generate in a range of rates of return (*including extremely low interest rates that some approaches still offer*). *Storing* your money in cash or equivalents will generally deliver stability, but with a relatively low (*some might say 'microscopic'*) return (*...although it is possible in early 2025 to get more than 3.0% interest on **savings** accounts at some online banks for your liquid-cash-on-hand needs*). See the table below:
|Assets| 1.0% | 1.25%| 1.5% | 1.75%| 2.0% | 2.5% | 3.0% | 3.5% | 4.0% | 4.5% | 5.0% | 5.5% | 6.0% |Assets|
|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|:----:|
| $50,000 | $500 | $625 | $750 | $875 | $1,000 | $1,250 | $1,500 | $1,750 | $2,000 | $2,250 | $2,500 | $2,750 | $3,000 | $50,000 |
| $100,000 | $1,000 | $1,250 | $1,500 | $1,750 | $2,000 | $2,500 | $3,000 | $3,500 | $4,000 | $4,500 | $5,000 | $5,500 | $6,000 | $100,000 |
| $250,000 | $2,500 | $3,125 | $3,750 | $4,375 | $5,000 | $6,250 | $7,500 | $8,750 | $10,000 | $11,250 | $12,500 | $13,750 | $15,000 | $250,000 |
| $500,000 | $5,000 | $6,250 | $7,500 | $8,750 | $10,000 | $12,500 | $15,000 | $17,500 | $20,000 | $22,500 | $25,000 | $27,500 | $30,000 | $500,000 |
| $750,000 | $7,500 | $9,375 | $11,250 | $13,125 | $15,000 | $18,750 | $22,500 | $26,250 | $30,000 | $33,750 | $37,500 | $41,250 | $45,000 | $750,000 |
| $1,000,000 | $10,000 | $12,500 | $15,000 | $17,500 | $20,000 | $25,000 | $30,000 | $35,000 | $40,000 | $45,000 | $50,000 | $55,000 | $60,000 | $1,000,000 |
| $1,250,000 | $12,500 | $15,625 | $18,750 | $21,875 | $25,000 | $31,250 | $37,500 | $43,750 | $50,000 | $56,250 | $62,500 | $68,750 | $75,000 | $1,250,000 |
| $1,500,000 | $15,000 | $18,750 | $22,500 | $26,250 | $30,000 | $37,500 | $45,000 | $52,500 | $60,000 | $67,500 | $75,000 | $82,500 | $90,000 | $1,500,000 |
| $1,750,000 | $17,500 | $21,875 | $26,250 | $30,625 | $35,000 | $43,750 | $52,500 | $61,250 | $70,000 | $78,750 | $87,500 | $96,250 | $105,000 | $1,750,000 |
| $2,000,000 | $20,000 | $25,000 | $30,000 | $35,000 | $40,000 | $50,000 | $60,000 | $70,000 | $80,000 | $90,000 | $100,000 | $110,000 | $120,000 | $2,000,000 |
| $2,250,000 | $22,500 | $28,125 | $33,750 | $39,375 | $45,000 | $56,250 | $67,500 | $78,750 | $90,000 | $101,250 | $112,500 | $123,750 | $135,000 | $2,250,000 |
| $2,500,000 | $25,000 | $31,250 | $37,500 | $43,750 | $50,000 | $62,500 | $75,000 | $87,500 | $100,000 | $112,500 | $125,000 | $137,500 | $150,000 | $2,500,000 |
| $2,750,000 | $27,500 | $34,375 | $41,250 | $48,125 | $55,000 | $68,750 | $82,500 | $96,250 | $110,000 | $123,750 | $137,500 | $151,250 | $165,000 | $2,750,000 |
| $3,000,000 | $30,000 | $37,500 | $45,000 | $52,500 | $60,000 | $75,000 | $90,000 | $105,000 | $120,000 | $135,000 | $150,000 | $165,000 | $180,000 | $3,000,000 |
| $3,250,000 | $32,500 | $40,625 | $48,750 | $56,875 | $65,000 | $81,250 | $97,500 | $113,750 | $130,000 | $146,250 | $162,500 | $178,750 | $195,000 | $3,250,000 |
| $3,500,000 | $35,000 | $43,750 | $52,500 | $61,250 | $70,000 | $87,500 | $105,000 | $122,500 | $140,000 | $157,500 | $175,000 | $192,500 | $210,000 | $3,500,000 |
| $3,750,000 | $37,500 | $46,875 | $56,250 | $65,625 | $75,000 | $93,750 | $112,500 | $131,250 | $150,000 | $168,750 | $187,500 | $206,250 | $225,000 | $3,750,000 |
| $4,000,000 | $40,000 | $50,000 | $60,000 | $70,000 | $80,000 | $100,000 | $120,000 | $140,000 | $160,000 | $180,000 | $200,000 | $220,000 | $240,000 | $4,000,000 |
| $4,250,000 | $42,500 | $53,125 | $63,750 | $74,375 | $85,000 | $106,250 | $127,500 | $148,750 | $170,000 | $191,250 | $212,500 | $233,750 | $255,000 | $4,250,000 |
| $4,500,000 | $45,000 | $56,250 | $67,500 | $78,750 | $90,000 | $112,500 | $135,000 | $157,500 | $180,000 | $202,500 | $225,000 | $247,500 | $270,000 | $4,500,000 |
| $4,750,000 | $47,500 | $59,375 | $71,250 | $83,125 | $95,000 | $118,750 | $142,500 | $166,250 | $190,000 | $213,750 | $237,500 | $261,250 | $285,000 | $4,750,000 |
| $5,000,000 | $50,000 | $62,500 | $75,000 | $87,500 | $100,000 | $125,000 | $150,000 | $175,000 | $200,000 | $225,000 | $250,000 | $275,000 | $300,000 | $5,000,000 |
| $5,250,000 | $52,500 | $65,625 | $78,750 | $91,875 | $105,000 | $131,250 | $157,500 | $183,750 | $210,000 | $236,250 | $262,500 | $288,750 | $315,000 | $5,250,000 |
| $5,500,000 | $55,000 | $68,750 | $82,500 | $96,250 | $110,000 | $137,500 | $165,000 | $192,500 | $220,000 | $247,500 | $275,000 | $302,500 | $330,000 | $5,500,000 |
| $5,750,000 | $57,500 | $71,875 | $86,250 | $100,625 | $115,000 | $143,750 | $172,500 | $201,250 | $230,000 | $258,750 | $287,500 | $316,250 | $345,000 | $5,750,000 |
|Assets| 1.0% | 1.25%| 1.5% | 1.75%| 2.0% | 2.5% | 3.0% | 3.5% | 4.0% | 4.5% | 5.0% | 5.5% | 6.0% |Assets|
Some individuals and families have retirement cash flow expectations of $150,000/yr, $200,000/yr, $300,000/yr, and some even more. I included some *big* numbers in the Assets column above to help demonstrate the scale of preparation required to support income streams like that. I read that too often, individuals spending at these levels in retirement have not constructed the required financial foundation, and burn through material portions of their retirement funds before aknowledging that situation -- leaving them seriously financially challenged for the duration of their life. My working assumption is that is not where any of us want to land.
Those upper rows refer to **material** wealth. Who has that kind of money?[[Note 6](#note_6)] Most don't. While there have been recent wage increases, [over the past 40 years wages have stagnated against the cost of living for most Americans](https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us-workers-real-wages-have-barely-budged-for-decades/). And the proportion of the U.S. population who have accumulated $1.2 million or more has shrunk and the distance between the median wealth and entry into the top 9.9% has more than doubled in the last 6 decades.
In "The 9.9 Percent," Matthew Stewart noted that in 1963, the median household would have needed 10 times as much wealth to reach the middle of the (*top*) 9.9 percent. Today (*2020 or 2021*), it would need 24 times as much wealth.
He also reported that it took $2.4 million in assets to reach the the 9.9 percent group's median... (Quoted from [a review by Eyal Press](https://www.nytimes.com/2021/11/18/books/review/the-99-percent-matthew-stewart.html)) The [U.S. Federal Reserve reported](https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:0;series:Net%20worth;demographic:networth;population:1,5,7;units:shares;range:1989.3,2021.3) that the top 1% of of Americans by accumulated wealth own over a third of all wealth in the country (roughly the same amount as the bottom 90%), while the bottom 50% own about 2.3% of all wealth. Those are just (*point-in-time*) facts but wealth was still [Similarly distributed in Q1 2025](https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:0;series:Net%20worth;demographic:networth;population:1,3,5,7,9;units:shares;range:1989.3,2025.1). They document the distribution of wealth in the U.S. -- that by almost any measure seems *unfair*. They do not, though, alter the ruthless impacts of time and aging that require planning for *old age* and whatever will be your retirement.
## Not All Asset Types Represent Equal Value in Retirement
Once you *retire* and begin drawing from your accumulated assets, it is also important to consider the impacts of taxes on your various options. Money in plain old-fashion bank savings accounts don't generate a taxable event when you make withdrawls. **Withdrawals from an Roth IRA are not taxable** if you are at least 59 1/2 (*which can be a material advantage*), as long as you have kept the money in the Roth IRA account for at least five years. As a result, those options are -- dollar for dollar -- *worth more* than traditional IRAs and 401(k)s. Withdrawals from defined-contribution plans like some types of IRAs and 401(k)s are treated as income and are taxable at your federal level, based on the amount of your overall taxable income. Withdrawals from taxable brokerage accounts are subject to capital gains tax on investment profits. Mutual funds can generate taxable capital gains even when **you** did not withdraw any money.
If your income flows in retirement are taxed as "income," here is a reminder of one key way to think through the priority of this issue to you:
2025 Marginal Income Tax Rates:
* 37% for incomes over $626,350 ($751,600 for married couples filing jointly).
* 35% for incomes over $250,525 ($501,050 for married couples filing jointly).
* 32% for incomes over $197,300 ($394,600 for married couples filing jointly).
* 24% for incomes over $103,350 ($206,700 for married couples filing jointly).
* 22% for incomes over $48,475 ($96,950 for married couples filing jointly).
* 12% for incomes over $11,925 ($23,850 for married couples filing jointly).
* 10% for incomes $11,925 or less ($23,850 or less for married couples filing jointly).
### Understanding Required Minimum Distributions (RMDs)
"You can't keep funds in a traditional IRA (including SEP and SIMPLE IRAs) indefinitely. Eventually, they must be distributed. If there are no distributions, or if the distributions aren't large enough, you may have to pay an excise tax on the amount not distributed as required." [[IRS Pub. 590-B (2024)](https://www.irs.gov/publications/p590b#en_US_2024_publink100090420)]
Required Minimum Distributions (RMDs) are the minimum amounts you must withdraw from your traditional IRA, SEP IRA, SIMPLE IRA, and certain other retirement plans once you reach age 73. If this is interesting or just relevant to you see: [Understanding Required Minimum Distributions](https://mccright.github.io/funding_retirement/minimum_distributions_reminder)
## Guaranteed Income and the Nature of Your Needs May Impact Investment Withdrawl Rates During Retirement
The model below is from an AARP Bulletin retelling of "The impact of Guaranteed Income and Dynamic Withdrawals on Safe Initial Withdrawal Rates" by David Blanchett, as well as my reading of the same.
### Share of your financial resources composed of guaranteed income
To use the table below, gather the following information:
1. My annual guaranteed retirement income is: ________ [Social Security + any other source like an annuity or pension]
2. My net worth is: ________ [real assets (*bank + investment balances + home equity + any-others*) minus debt (*of all types*)] (*if you have questions about what to include in a net worth statement, see the Federal Reserve "[Asset and Debt Categories in Calculation of Net Worth Flow Chart](https://www.federalreserve.gov/econres/files/Networth%20Flowchart.pdf)"*)
3. My total financial resources are: ________ [Add the values in #s 1 and 2 above -- guaranteed income current value plus net worth]
4. Calculate the share (%) of your total financial resources that is guaranteed income: ________ [divide guaranteed income by total financial resources]
5. My percentage of spending that is nondiscretionary: ______ [spending that I cannot change - stuff like housing, health care, for some even food]
Some portion of consumption/spending is sometimes discretionary. In the United States, that is not the norm for every retiree. David Blanchett argues that "Most retirees will likely have a retirement income goal that will support a combination of discretionary and nondiscretionary needs. In other words, retirees are generally able to adjust some aspects of consumption, but not necessarily all aspects (at least without a significant degree of pain). For example, some expenses may be relatively fixed in nature, such as housing and health care, while others can more easily be adjusted, such as entertainment and transportation, and still others may be a combination of the two, like food."
6. Finally, find the squares on the table below at the intersection of your "Share of your financial resources composed of guaranteed income" and the percentage of your spending that is nondiscretionary.
% of guaranteed income of your financial resources
|% nondiscretionary| 5% |25% |50% |75% | 95%|
|:----------------:|:--:|:--:|:--:|:--:|:--:|
|0%|2.4%|3.6%|4.4%|5.1%|6.9%|
|25%|2.4%|3.5%|4.2%|5.0%|6.8%|
|50%|2.4%|3.3%|4.0%|4.8%|6.6%|
|75%|2.2%|3.1%|3.8%|4.7%|6.4%|
|100%|2.0%|2.1%|3.6%|4.5%|6.3%|
The *percent of guaranteed income* columns represent what David Blanchett's calculations estimate how much his model predicts that you can withdraw in your first year of retirement. The annual amount is then indexed upward to match inflation. *This approach -- "annual amount is then indexed upward to match inflation" -- may be overly optimistic in periods of high inflation, for example 2021/2022!*
### Plan for what your retirement will be
Here is an essay that will help you get started thinking: ["How to Enjoy Retirement Without Going Broke"](https://www.nytimes.com/2021/08/27/opinion/how-to-enjoy-retirement-without-going-broke.html), By Petter Coy, 2021-08-28,
### What About Those FIRE -- *financial independence, retire early* -- Promoters?
Achieving financial independence *early* is an attractive dream. For many, the **FIRE** -- *financial independence, retire early* -- movement is linked to to the [1992 book "Your Money or Your Life"](https://yourmoneyoryourlife.com/history/) by Joseph Dominguez and Vicki Robin. My wife and I, along with a number of others read this book together in the mid-1990s and it helped shape some context for our retirement planning (*but we could in no way be considered adoptees of the FIRE movement*). We emphasized "financial independence" facet of FIRE. And I think that it helped my wife have the courage to change careers earlier than she had originally expected. I highly recommend checking it out of your local library and reading it -- but there are many origin stories for living simply while preparing for *your* financial and personal well being in the future. CAUTION: **There is no magic in the FIRE community.** Based on my reading and life experience, the FIRE dream generally requires *extreme* savings over *long* periods of time followed by *materially constrained* spending until you die. Are there exceptions? Sure. **The FIRE lifestyle is not for everyone.** See this short essay by Christine Benz, "[My Baptism by FIRE: Lessons on Financial Independence](https://www.morningstar.com/personal-finance/my-baptism-by-fire-lessons-financial-independence)."
### What About Those Artificial Intelligence (AI) Promoters?
Various flavors of AI are being integrated into the financial services *supply chain.* Here is an example of how one individual coached an AI service into building a financial plan for targeted individuals: [https://github.com/gabrielchua/hacksg24/blob/main/prompt.txt](https://github.com/gabrielchua/hacksg24/blob/main/prompt.txt).
#### Additional References:
* "Workers' Expectations About Their Future Social Security Benefits: How Realistic Are They?" by John A. Turner and David Rajnes, Social Security Bulletin, Vol. 81 No. 4, 2021. [https://www.ssa.gov/policy/docs/ssb/v81n4/v81n4p1.html](https://www.ssa.gov/policy/docs/ssb/v81n4/v81n4p1.html)
* "Can We Predict Boomer's Drawdown Behavior from Earlier Cohorts?"
By Gal Wettstein and Robert L. Siliciano, Center for Retirement Research at Boston College (CRR), May 2022, Number 22-8. [https://crr.bc.edu/wp-content/uploads/2022/05/IB_22-8.pdf](https://crr.bc.edu/wp-content/uploads/2022/05/IB_22-8.pdf)
* The number of IRA and 401k millionaires goes up and down, but there are still a lot of them... [https://www.washingtonpost.com/business/2022/02/18/fidelity-401k-millionaires/](https://www.washingtonpost.com/business/2022/02/18/fidelity-401k-millionaires/) and more recently [https://www.washingtonpost.com/business/2022/05/27/fidelity-401k-millionaires-drop/](https://www.washingtonpost.com/business/2022/05/27/fidelity-401k-millionaires-drop/).
* "How to Enjoy Retirement Without Going Broke" by Peter Coy, 2021-08-27, [https://www.nytimes.com/2021/08/27/opinion/how-to-enjoy-retirement-without-going-broke.html](https://www.nytimes.com/2021/08/27/opinion/how-to-enjoy-retirement-without-going-broke.html)
* "Retirement Income Analysis with scenario matrices." by William F. Sharpe, [https://web.stanford.edu/~wfsharpe/RISMAT/](https://web.stanford.edu/~wfsharpe/RISMAT/)
* "The impact of Guaranteed Income and Dynamic Withdrawals on Safe Initial Withdrawal Rates" by [David Blanchett](http://www.davidmblanchett.com/research), Journal of Financial Planning [https://www.financialplanningassociation.org/article/journal/APR17-impact-guaranteed-income-and-dynamic-withdrawals-safe-initial-withdrawal-rates](https://www.financialplanningassociation.org/article/journal/APR17-impact-guaranteed-income-and-dynamic-withdrawals-safe-initial-withdrawal-rates)
* AARP Bulletin (*paper copy*), "Real Possibilities" October 2019, page 16.
* "What's a Safe Retirement Spending Rate for the Decades Ahead?" [https://www.morningstar.com/articles/1066569/whats-a-safe-retirement-spending-rate-for-the-decades-ahead](https://www.morningstar.com/articles/1066569/whats-a-safe-retirement-spending-rate-for-the-decades-ahead)
* "Rethinking the 4% Safe Withdrawal Rule." Posted on November 18, 2021 by fritz@theretirementmanifesto.com, [https://www.theretirementmanifesto.com/rethinking-the-4-safe-withdrawal-rule/](https://www.theretirementmanifesto.com/rethinking-the-4-safe-withdrawal-rule/)
* "The State of Retirement Withdrawal Strategies for 2025." where Morningstar suggests "a starting safe withdrawal rate of 3.7% for 2025." [https://www.morningstar.com/...the-state-of-retirement-income](https://www.morningstar.com/business/insights/research/the-state-of-retirement-income)
* Fritz Gilbert's "The 5 Most Important Factors In Your Decision To Retire" [https://www.theretirementmanifesto.com/the-5-most-important-factors-in-your-decision-to-retire/](https://www.theretirementmanifesto.com/the-5-most-important-factors-in-your-decision-to-retire/)
* "Financial Planning for Retirement: It’s More Accessible, but Be Careful." By By Mark Miller, 2023-01-06 [https://www.nytimes.com/2023/01/06/business/retirement-planning-advice.html](https://www.nytimes.com/2023/01/06/business/retirement-planning-advice.html)
* Issues in retirement security [https://en.wikipedia.org/wiki/Issues_in_retirement_security](https://en.wikipedia.org/wiki/Issues_in_retirement_security)
* The CNN Fear & Greed Index is a way to view stock market movements and whether stocks are *fairly* priced. It is a compilation of seven different indicators that measure some aspect of stock market behavior. The theory is based on the logic that excessive fear tends to drive down share prices, and too much greed tends to have the opposite effect. CNN suggests it can be used to gauge the mood of the market. [https://www.cnn.com/markets/fear-and-greed](https://www.cnn.com/markets/fear-and-greed)
* The **best** command line stock price grabber for a quick sanity check! Thank you Patrick Stadler. [https://github.com/pstadler/ticker.sh](https://github.com/pstadler/ticker.sh)
* And another great-looking command line stock price grabber: ```curl https://terminal-stocks.herokuapp.com/```. Thank you Shashi Prakash Gautam for your excellent app. [https://github.com/shweshi/terminal-stocks](https://github.com/shweshi/terminal-stocks)
* Try to build an understanding of how education is important to retirement security -- part of which is expanding your knowledge about what influences educational inequality in the U.S. See: "Educational Inequality" By Jo Blanden, Matthias Doepke, and Jan Stuhler, NBER Working Paper No. 29979, April 2022. [https://www.nber.org/system/files/working_papers/w29979/w29979.pdf](https://www.nber.org/system/files/working_papers/w29979/w29979.pdf)
* Use caution when reading formal economic texts -- more than a generation of economists reasoned in terms that may be misaligned with your best interest... See: "[The World in the Model: How Economists Work and Think](https://www.cambridge.org/core/journals/economics-and-philosophy/article/abs/world-in-the-model-how-economists-work-and-think-mary-s-morgan-cambridge-university-press-2012-xvii-421-pages/8064BAA5C6DB588F3F8BCC98B54638B4)" By Mary S. Morgan (2012). Quote: "Economists came to see the economy differently after they had learnt to represent it in models, to express claims about it and reason about it in terms of those models."
* TECHNICAL RESEARCH - [finagg](https://github.com/theOGognf/finagg): Financial Aggregation for Python. finagg is a Python package that provides implementations of popular and free financial APIs, tools for aggregating historical data from those APIs into SQL databases, and tools for transforming aggregated data into features useful for analysis and AI/ML. Documentation: https://theogognf.github.io/finagg/. PyPI: https://pypi.org/project/finagg/. Repository: https://github.com/theOGognf/finagg
* "Planning for 100-year lives: How fintech can reshape wealth for the longevity economy." By Roger Rouhana and Davide Lodolini, Jun 16, 2025, Centre for Financial and Monetary Systems -- World Economic Forum: [https://www.weforum.org/...planning-for-100-year-lives...](https://www.weforum.org/stories/2025/06/planning-for-100-year-lives-how-fintech-can-reshape-wealth-for-the-longevity-economy/?utm_source=tldrfintech)
* To Do: Look at the usefulness/viability of services like [RetireUS](https://retire.us/about-us)
#### NOTES
**Note 1**: Unfortunately, planning for and building a formal retirement plan is an [unattainable luxury for too many people in the United States](https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States).
[Jack Caporal](https://www.linkedin.com/in/jack-caporal) reported in March 2024 "[The average net worth of an American is roughly $192,700., but looking at the average net worth by age, educational attainment, and race reveals a more complicated picture.](https://www.fool.com/research/average-net-worth-americans/):" "Net worth is also heavily stratified by race. The average net worth of white Americans is roughly six times higher than the median net worth of Black Americans and nearly five times higher than that of Hispanic Americans."
In March 2022 the U.S. Bureau of Labor Statics reported that [65% of civilian workers had some access to medical care and retirement benefits with 71% of them participating -- (*24% defined benefit and 55% defined contribution*)](https://www.bls.gov/ncs/ebs/benefits/2022/home.htm), see the U.S. Bureau of Labor Statics' [2010 – 2022 historical Excel dataset (XLSX)](https://www.bls.gov/ncs/ebs/xlsx/employee-benefits-in-the-united-states-dataset.xlsx). [Get the latest Employee Benefits Survey numbers [here](https://www.bls.gov/ebs/latest-numbers.htm)] That leaves ~35% of American civilian workers without access to employer sponsored medical care and retirement benefits. [In 2019 families with the lowest 25% of net worths in the U.S.](https://www.federalreserve.gov/publications/files/scf20.pdf)[page 10], had a median (the middle value in the data set) income of $29,900, and mean (*average*) income of $37,900 -- leaving little *excess* for saving/investing. [Systemic and cultural barriers constrain opportunities for some](https://www.federalreserve.gov/econres/notes/feds-notes/disparities-in-wealth-by-race-and-ethnicity-in-the-2019-survey-of-consumer-finances-20200928.htm), especially those most impacted by America's original sins -- genocide and slavery. Also see: [https://www.stlouisfed.org/open-vault/2020/december/has-wealth-inequality-changed-over-time-key-statistics](https://www.stlouisfed.org/open-vault/2020/december/has-wealth-inequality-changed-over-time-key-statistics), [https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions](https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions) and "The Distribution Of Household Wealth By Race And Ethnicity" & "Distribution Of Household Wealth By Amount of Wealth and Race of Householder 2022" on pages 2 & 3 of [Wealth of Households: 2022](https://www2.census.gov/library/publications/2024/demo/p70br-202.pdf) (*published [November 2024](https://www.census.gov/library/publications/2024/demo/p70br-202.html)*). For example, in Central Iowa, [United Way recently reported](https://www.unitedwaydm.org/community-report) that "36% of Black and 19% of Latino households have $0 net worth". I understand some of these abstract facts but don't understand the nature and scope of societal evolution that could eliminate this curse -- the [Washington Center for Equitable Growth](https://equitablegrowth.org/who-we-are/) offers [some policy ideas](https://equitablegrowth.org/policy-prescriptions-for-the-flawed-and-unequal-retirement-savings-systems-that-perpetuate-u-s-economic-inequality/). For anyone caught up in the American *Justice* system (*Native Americans and African Americans are over-represented there*) [costs and fees throughout the court, jail and prison systems pose another systemic force resisting any accumulation of individual's or family's wealth -- generally when they have few resources, forcing them into debt and damaging their credit ratings](). Kirk Semple and Jonah M. Kessel examine how court debt [extracts wealth from some of the nation’s poorest people is counterproductive and can further destabilize society](https://www.nytimes.com/2024/10/16/opinion/jail-fees-mass-incarceration.html).
**Note 2**: Cryptocurrency (crypto), a large, complex, evolving universe decentralized digital currencies and infrastructure, seems misaligned with **most** of our retirement wealth accumulation and income generation needs. Cryptocurrencies play a material role in criminal activity across the globe. Cryptocurrency exchanges tend to resist participation in '*know your customer*' and other crime-resisting measures. More than a few cryptocurrency platforms have suffered large-scale losses -- and some of those appear to have been the result of founder's/leader's intended business model. [Hostile parties stole at least US$3.2 billion worth of cryptocurrency in 2021, and in the first three months of 2022 they have stolen another US$1.3 billion](https://blog.chainalysis.com/reports/2022-defi-hacks/). Cryptocurrency mining and use of underlying blockchain technology for *recorkeeping* seem excessively energy consumptive (i.e., *environmentally destructive*). Administering transactions via blockchain technology can, at an operational level remain largely opaque and introduces a spectrum of fees that aren't itemized in traditional financial services (leading to surprises for too many). The lifecycles of some cryptocurrencies have appeared to be little more than unregulated pump-and-dump, digital grifter schemes. There are also [newer entrants into this crypto marketplace](https://www.washingtonpost.com/technology/2022/04/06/women-crypto-nft/) preying on other's fear of missing out. [Paul Krugman argued](https://www.nytimes.com/2022/01/27/opinion/cryptocurrency-subprime-vulnerable.html) that "there's growing evidence that the risks of crypto are falling disproportionately on people who don't know what they are getting into and are poorly positioned to handle the downside." I recognize that cryptocurrencies have generated returns for some, but I believe it would be an investment mistake to draw too many parallels with more traditional forms of investing and units of wealth accumulation. As of Q2 2023, I do not view cryptocurrency as a **material** component in any risk-reasonable retirement portfolio (except for those who maintain large-scale multi-generational wealth, where it may have a place in their diversification program). See: [https://www.investopedia.com/tech/what-are-legal-risks-cryptocurrency-investors/](https://www.investopedia.com/tech/what-are-legal-risks-cryptocurrency-investors/), [https://legal.thomsonreuters.com/blog/cryptocurrency-risks-to-your-institution-and-the-regulatory-landscape/](https://legal.thomsonreuters.com/blog/cryptocurrency-risks-to-your-institution-and-the-regulatory-landscape/), and *a little dated* [https://www.forbes.com/sites/dantedisparte/2018/07/21/beware-of-crypto-risks-10-risks-to-watch/?sh=1b5fd7d5f17f](https://www.forbes.com/sites/dantedisparte/2018/07/21/beware-of-crypto-risks-10-risks-to-watch/?sh=1b5fd7d5f17f).
Honestly, I often think anyone who is not a professional investor might -- given the odds of realized returns -- be better off buying a lottery ticket every time they catch themselves thinking about investing directly in cryptocurrency. Here are some sample lottery winning odds (it costs $2 US per ticket to play):
|Match| Powerball $ | Powerball Odds | Mega-Millions $ | Mega-Millions Odds |
|:----|:-----:|:-----:|:-----:|:-----:|
|5 + 1 | Jackpot | 1 in 292,201,338 | Jackpot | 1 in 302,575,350 |
|5 + 0 | $1,000,000 | 1 in 11,688,054 | $1,000,000 | 1 in 12,607,306 |
|4 + 1 | $50,000 | 1 in 913,129 | $10,000 | 1 in 931,001 |
|4 + 0 | $100 | 1 in 36,525 | $500 | 1 in 38,792 |
|3 + 1 | $100 | 1 in 14,494 | $200 | 1 in 14,547 |
|3 + 0 | $7 | 1 in 580 | $10 | 1 in 606 |
|2 + 1 | $7 | 1 in 701 | $10 | 1 in 693 |
|1 + 1 | $4 | 1 in 92 | $4 | 1 in 89 |
|0 + 1 | $4 | 1 in 38 | $2 | 1 in 37 |
The [Powerball](https://www.usamega.com/powerball/faq) and [Mega-Millions](https://www.usamega.com/mega-millions/faq) numbers in the table above were valid on 2024-03-27. The games also include ways to "enhance" you winnings by purchasing *multipliers*, but the simplified version above is only to illustrate my disbelief in engaging directly in cryptocurrecy markets as a risk-reasonable component of a retirement investment portfolio for almost all of us.
Also, hostile nations use cryptocurrencies to avoid sanctions and industry practices and rhetoric seem too often to support this activity under the general frame of "*freedom*." In the context of the Russian (*Putin's*) war to crush Ukraine and the Ukrainian people, and annex Ukraine's territory as it's own [some *boosters* are highlighting cryptocurrency as a tool for sanctions-dodgers](https://www.washingtonpost.com/world/2022/03/06/russia-ukraine-war-news-putin-live-updates/#link-DMXOOTU5YBAGJK7LEP676M4VVY) -- which seems like a useful real-world example of a mis-use case. This is **real** war of aggression -- doing what this type of agression has always done, industrial-scale murder, destruction of physical and operational infrastructure, along with destruction of industrial, agricultural, and social governance capacity, and individual human and collective suffering on a national scale -- laying waste to a democratic nation of 43 million people. Highlighting cryptocurrencies as a way to support portions of the Russian war-time economy (*while generating profits for cryptocurrency insiders*) is by any measure not something for *normal* economic market participants or for supporters of democracy and human decency. North Korea (*Democratic People's Republic of Korea*) steals money to help fund its nuclear arms activities. One of its hacking teams called the Lazarus Group, recently stole around $620 million in cryptocurrency Ethereum from the video game Axie Infinity (*the hackers infiltrated part of the underlying blockchain that powers the game, Ronin*) after stealing nearly $400 million in cryptocurrency in 2021. See: "North Korean hackers linked to $620 million Axie Infinity crypto heist." By Aaron Schaffer, 2022-04-14. [https://www.washingtonpost.com/technology/2022/04/14/us-links-axie-crypto-heist-north-korea/](https://www.washingtonpost.com/technology/2022/04/14/us-links-axie-crypto-heist-north-korea/) and "North Korean Hackers Stole Nearly $400 Million in Crypto Last Year." By Andy Greenberg. 2022-01-14. [https://www.wired.com/story/north-korea-cryptocurrency-theft-ethereum/](https://www.wired.com/story/north-korea-cryptocurrency-theft-ethereum/)
If after all that, you still think it is important to invest (*cough... "gamble"*) in cryptocurrencies, there are ways to do so via more effectively regulated markets (*you might start with a [Morningstar search](https://www.morningstar.com/search?query=crypto)*), or consider doing so via [one or another cryptocurrency ETF](https://etfdb.com/etfs/currency/cryptocurrency/?search[inverse]=false&search[leveraged]=false#etfs__overview&sort_name=assets_under_management&sort_order=desc&page=1), sometimes also called a crypto-based exchange-traded products or "ETP." Again, as with any investment, think it through before spending any money -- according to the [Crypto Fund Research](https://cryptofundresearch.com/about/) fees can be as high as 22% - [2023 Q4 Crypto Fund Report](https://cryptofundresearch.com/q4-2023-crypto-fund-report/):
>"A 2% management fee and 20% incentive/performance fee (2/20) is the most common fee structure among crypto funds. However, the average fees across all funds tend to be lower and vary slightly between fund types. Index and other passive strategies often don't charge a performance fee, while funds with more active investment strategies tend to have higher performance fees (and sometimes lower management fees)." (*page 11*)
I used to maintain a separate cryptocurrency rant at [https://github.com/mccright/rand-notes/blob/master/cryptocurrency-notes.md](https://github.com/mccright/rand-notes/blob/master/cryptocurrency-notes.md) but it is currently a virtually useless mess.
**Note 3**: If you are going to use a financial advisor, think about the importance of choosing one who must maintain your *best interest* in all investment decision-making -- one covered by the 'Best Interest' Obligation [Rule 15/-1](https://www.ecfr.gov/current/title-17/chapter-II/part-240/subject-group-ECFR64f52d737aea1ed/section-240.15l-1) under the [Securities and Exchange Act of 1934](https://www.ecfr.gov/current/title-17/chapter-II/part-240?toc=1). Full (770 page) 'Regulation Best Interest' Effective September 10, 2019 [https://www.sec.gov/rules/final/2019/34-86031.pdf](https://www.sec.gov/rules/final/2019/34-86031.pdf). Investment advisor disclosures can be hard to read. Here is an example of how one financial advisor discloses this 'Regulation Best Interest' information: [https://www.wellsfargoadvisors.com/bw/pcg/forms/594020.pdf](https://www.wellsfargoadvisors.com/bw/pcg/forms/594020.pdf). One way to help deal with identifying *trustworthiness* is to consider only those advisors who have earned the certified financial planner (CFP®) designation (*an individual who has received a formal designation from the [Certified Financial Planner Board of Standards, Inc.](https://www.cfp.net/)*) -- "[All CFPs are held to the standard of fiduciary duty, which means that they must always put your interests as a client ahead of their own.](https://www.cfp.net/ethics/code-of-ethics-and-standards-of-conduct)" Also, verify that anyone claiming to have this designation is registered with the U.S. SEC at: [https://adviserinfo.sec.gov/](https://adviserinfo.sec.gov/), which also includes a report that may also identify "customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of."
That said, just because you hear a financial advisor say the word "fiduciary" in one or another context does not mean that they are acting as a "fiduciary" for you. Today, it appears that you must have that relationship formalized in writing between yourself and a given Financial Advisor before it becomes meaningful. Here are a couple examples from large, well-established investment advice and management companies:
After 2,535 words of legaleze, one financial "wealth management" company documents in its "[Relationship Disclosures](https://www.janney.com/wealth-management/disclosures-agreements/relationship-summary-regulation-best-interest/regulation-best-interest-disclosure-regbi)" (*downloaded 2024-03-26*) that:
>"Unless we agree in writing, we do not act as a “fiduciary” under the retirement laws when we provide non-discretionary investment recommendations to you, including when we have a “best interest” or “fiduciary” obligation under other federal or state laws."
After 1,780 words, another company says in its ["Regulation Best Interest Disclosure" document](https://www.wellsfargoadvisors.com/bw/pcg/forms/594020.pdf) (*downloaded 2024-03-26*) that:
>"We are not your investment adviser or fiduciary unless we have expressly agreed to act in such a capacity with you in writing."
These types of guarantees might seem counter-intuitive, but I assume they were legal when they were written...
**Note 4**: It is hard to exaggerate the need for some money set aside for an unexpected expense or a financial market shock (*and the challenges that presents for some, see NOTE 1 above*). [Robert Powell reported](https://desmoinesregister-ia.newsmemory.com?selDate=20220403&goTo=D003&artid=0) that according to a recent Society of Actuaries survey:
>"When asked what they could afford to spend out of pocket on an emergency without jeopardizing their retirement security, half of pre-retirees report that they could only afford to spend $10,000 or less and more than half of retirees could afford no more than $25,000. Black/African American pre-retirees (61%) are more likely than pre-retirees in general (40%) to be impacted by an unexpected expense of up to $10,000. Among retirees, Black/African American respondents (58%) and Hispanic/ Latino (52%) said they are not able to spend $10,000 without it affecting their retirement security. This was much greater than the general retiree response (32%), according to the Society of Actuaries survey. Most financial planners recommend that you have at least three to six months of living expenses set aside for, well, emergencies or financial shocks, such as a new roof or dental work." That is a lot of money, but essential to weather the types of *surprises* that are a virtual certainty at one time or another. Roger Whitney, host of the ["Retirement Answer Man" pod-cast](https://www.rogerwhitney.com/blog) advised that when unexpected spending shocks "happen in retirement – after income from work ends – they aren't as easily absorbed or worked through. To be better prepared, create options for your future self to deal with a shock. Building cash reserves above a normal emergency fund, eliminating debt to lower fixed monthly payments, or working part time can help create financial slack to help you be agile as your retirement life unfolds."
Similarly, the [Willis Towers Watson's "2022 Global Benefits Attitudes Survey"](https://www.wtwco.com/en-US/Insights/2022/07/infographic-half-of-us-employees-face-retirement-risks) (*35,549 employees from large and midsize private employers in 23 markets participated in the WTW survey*) concluded that "half of employees face key risks to their retirement security:"
* 35 percent of millennial workers were *undersaving* -- saving only 5 percent or less of their income
* 18 percent -- *of those with a defined contribution plan* -- had taken a loan from their 401(k)
* 20 percent had withdrawn funds from their 401(k). Yet, 52 percent said they expected to retire before 65
Also see the 2022 Survey of Household Economics and Decisionmaking (SHED), May 2023 "[Economic Well-Being of U.S. Households in 2022](https://www.federalreserve.gov/consumerscommunities/shed.htm)."
In October 2023, Cora Lewis (Associated Press) [reported](https://apnews.com/article/inflation-debt-poll-personal-finance-economy-dd4c88e2076d1fd3f85c51fb8992583b) that: "Relatively few Americans say they’re very or extremely confident that they could pay an unexpected medical expense (26%) or have enough money for retirement (18%)." And, "Among those who are retired, (*only*) 3 in 10 say they are highly confident that there’s enough saved for their retirement."
As a reminder, downturns happen, and each of us need to prepare for them. In 2013, [Michael A. Fletcher wrote](https://www.washingtonpost.com/business/economy/fiscal-trouble-ahead-for-most-future-retirees/2013/02/16/ae8c7350-5905-11e2-88d0-c4cf65c3ad15_story.html) in the Washington Post Business section that:
>The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. And the full extent of the damage is only now being grasped by experts and policymakers. There was already mounting concern for the long-term security of the country's rapidly graying population. Then **the downturn destroyed 40 percent of Americans' personal wealth, while creating a long period of high unemployment and an environment in which savings accounts pay almost no interest.** Although the surging stock market is approaching record highs, most of these gains are flowing to well-off Americans who already are in relatively good shape for retirement.
The 2025 [BankRate/SSRS yearly emergency savings report](https://www.bankrate.com/banking/savings/emergency-savings-report/) reported that:
>"Sixty percent of Americans are uncomfortable with their level of emergency savings — 31 percent are very uncomfortable, and 29 percent are somewhat uncomfortable. Only 40 percent of people are comfortable with their level of emergency savings, including 27 percent who are somewhat comfortable and 13 percent who are very comfortable."
Before 2022, the percentage had been rising, from 37 percent in 2018 to 44 percent in 2020, 48 percent in 2021, 58 percent in 2022 and 57 percent in 2023.
>"Nearly 1 in 4 (24 percent) of Americans have no emergency savings at all."
Generationally, Americans' comfort with their emergency savings levels varies widely.
>"Gen Zers and Gen Xers (ages 45-60) are the least likely to feel comfortable with their emergency savings — 29 percent and 31 percent, respectively — compared to 40 percent of millennials (ages 29-44) and 52 percent of baby boomers (ages 61-79)."
>"Between 2011 and 2022, less than 30 percent of Americans had more credit card debt than emergency savings. But in 2023, amid a period of high inflation, that percentage soared to 36 percent, where it stayed for two years. Now, in 2025, the percentage of people with more credit card debt than emergency savings has fallen to 33 percent, but it’s still much higher than it was before 2023. On the contrary, more Americans (53 percent) have more emergency savings than credit card debt. Those percentages have hovered between 51 percent and 55 percent since 2021. Another 13 percent of Americans say they have no credit card debt or emergency savings."
>"More than 1 in 3 Americans needed to tap their emergency savings in the past year. 37% of U.S. adults needed to use their emergency savings at some point in the last 12 months, as of February 2025. 80% of those people used the money for essentials, such as an unplanned emergency expense, monthly bills and/or day-to-day expenses." "...about half (51 percent) of people who used their emergency savings in the past year did so for an unplanned emergency expense, such as a medical bill or car repair; monthly bills, such as rent and utilities (38 percent); and/or day-to-day expenses, such as food or supplies (32 percent). Many people who withdrew from their emergency savings in the past year also did so in order to help a family member or friend (22 percent) or to pay down debt (21 percent). Only a small percentage (19 percent) of people who withdrew from their emergency savings in the past year did so for non-essential reasons."
A [2024 AARP Survey](https://press.aarp.org/2024-4-24-New-AARP-Survey-1-in-5-Americans-Ages-50-Have-No-Retirement-Savings) of [8,368 individuals](https://www.aarp.org/content/dam/aarp/research/topics/work-finances-retirement/financial-security-retirement/financial-security-trends-january-2024-methodology.doi.10.26419-2fres.00525.046.pdf) independently confirmed BankRate/SSRS 2024 survey results...
In September 2024, [TIAA Institute research found](https://www.tiaa.org/public/institute/publication/2024/gap-years-to-golden-years-gen-z-current-thinking-about-retirement#) that only one in five Gen Zers (*20% of the U.S. Gen Z population*) "are setting aside any money at all for retirement," but that "two thirds of Gen Zers who **are** saving for retirement use 401(k)s."
The [median average credit card interest rate for March (2025) is 24.2 percent](https://www.washingtonpost.com/business/2025/03/14/tips-prepare-recession-economy-trump/), according to Investopedia.
I understand (*see NOTE 1 above*) that serious emergency savings may not be practical for everyone, but keep the need to fund some emergency savings in whatever planning you establish.
**Note 5**: I am aware of what *may be* at least one long term *exception* -- U.S. [Series I Savings Bonds](https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds_ibuy.htm). They are inflation indexed and were [paying 9.62% in the period May 1, 2022 to October 31, 2022](https://treasurydirect.gov/indiv/research/indepth/ibonds/res_ibonds.htm#irate). See: [https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm](https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm) as well as a couple articles for context at [https://www.washingtonpost.com/business/2022/05/03/inflation-government-i-savings-bonds/](https://www.washingtonpost.com/business/2022/05/03/inflation-government-i-savings-bonds/) and [https://www.washingtonpost.com/business/2022/07/20/buying-inflation-indexed-i-bonds/](https://www.washingtonpost.com/business/2022/07/20/buying-inflation-indexed-i-bonds/)
**Note 6**: [David Streitfeld wrote in May 2022](https://www.nytimes.com/2022/05/10/business/economy-boom-times.html) that "There are 22 million U.S. millionaires, Credit Suisse estimates, up from fewer than 15 million in 2014." In their [Global Wealth Report 2025](https://www.ubs.com/us/en/wealth-management/insights/global-wealth-report.html) UBS researchers said that there were 23.8 million U.S. millionaires at the end of 2024 -- which was almost 40% of the world's total (*page 21*).
**Note 7**: 'Average [life expectancy](https://en.wikipedia.org/wiki/Life_expectancy)' and mortality are interesting topics. Most of us can influence how long we may live. How we eat, work, interact with those around us, and more can have material impacts on our longevity. Looking at a mortality table can be eye-opening for anyone who *just doesn't think about how long they will live*. For a recent example see: "Provisional Life Expectancy Estimates for 2021." By Elizabeth Arias, Ph.D., Betzaida Tejada-Vera, M.S., Kenneth D. Kochanek, M.A., and Farida B. Ahmad, M.P.H.; 2022-08-31 [https://www.cdc.gov/nchs/data/vsrr/vsrr023.pdf](https://www.cdc.gov/nchs/data/vsrr/vsrr023.pdf). See your "life expectancy, by age, race and Hispanic origin, and sex: United States, 2021" in the table on page 2 (*at the time of writing, it says I am expected to live another roughly 17 years*).
>Life expectancy at birth for males in 2021 was 73.2 years, representing a decline of 1.0 year from 74.2 years in 2020. For females, life expectancy declined to 79.1 years, decreasing 0.8 year from 79.9 years in 2020
The remaining life expectancy is the expected remaining number of years of life as a function of current age, [2020 statistics](https://www.ssa.gov/oact/STATS/table4c6.html). Life expectancy at birth is indicated above the "0" current age. From: [Wikipedia](https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_life_expectancy)
### Resources to Review
* https://www.wadepfau.com/
* https://www.rogerwhitney.com/blog
* RISA® (Retirement Income Style Awareness) "assessment designed to help you more clearly understand which retirement income strategies align most closely with your preferences." https://risaprofile.com/
* "How to Talk About Money When Only One of You Wants To." https://retirementresearcher.com/how-to-talk-about-money-when-only-one-of-you-wants-to/
* The Humble Dollar: https://humbledollar.com/money-guide/retirement/
* Risk Tolerance: https://humbledollar.com/money-guide/personal-risk-tolerance/
### Random Unfinished Thoughts
**What might signal a weakening market?**
The first answer is I don't know (*and you probably don't know*) when a market downturn will happen. They do happen, though...
* Material changes in the price of gold. I read that most people move wealth into gold in an attempt to avoid losses and that central banks do so when they lose faith in given currencies. (*That "avoid losses" rationale seems to depend on knowing when a market downturn will happen.*)
* Money moving into international markets.
* Rising defaults reaching material levels.
* *Crisis* changes in trade relationships.
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