Posted on | October 10, 2010
Who Can Retire at 65?
In the early 1970s, the U.S. Bureau of Labor Statistics projected what would happen to American males by age 65. Out of every 100 American males:
- 54 percent would still be dependent
- 36 percent would be dead (that’s improved since 1970)
- 5 percent would still be working to provide basic necessities
- 4 percent would have an income that could sustain them
- 1 would be rich
Those numbers are pretty true even today, 40 years later.
“The Today Show” recently reported that more than 50 percent of Baby Boomers will likely outlive their money and need to rely on Social Security, charity, welfare or their children for support.
I’ve noticed that 95 percent of us are following the same old advice.
- We sock away funds in IRAs and 401ks.
- We delay taxes.
- We hope that we’ll be in a lower tax bracket when we retire.
- We send extra principle payments to the mortgage company.
- We lack liquidity and safety of principle.
Only 5 percent have taken the steps to not outlive their money.
They arrive at “The Land of Peace and Abundance.” They experience tremendous freedom. They have enough money accumulated to generate conservative, predictable, tax-free rates of return.
What are they doing differently? Why can’t we get 95 percent of citizens to be financially independent after 40 years of working?
“Baby Boomer Blunders”
In my e-book “Baby Boomer Blunders,” I discuss the 10 financial mistakes that threaten your retirement. Here’s a sample of the mistakes you could be making:
1. Using Short-Term Investments for Long-Range Goals
CDs and money markets are “crawl investments” that produce low returns and are taxed as earned. There are better alternatives.
2. Expecting to Live 15 or 20 Years After Retirement
If you’re a Boomer couple, it’s highly predictable that one of you will live to age 95.
3. Believing That Paying Off Your House Will Give You Peace of Mind
One of the greatest answers to becoming financially independent is sitting under your own roof.
4. Thinking a $100,000 to $300,000 Nest Egg Will Be Enough
It won’t. You’re going to need at least $1 million to generate $60,000 to $80,000 of annual income.
5. Thinking You’re Going to Be In a Lower Tax Bracket When You Retire
You’ve probably gotten rid of your deductions and dependents, paid off your house and are no longer contributing to an IRA or 401k. The government is raising taxes 8 to 12 percent over the next 12 to 24 months.
That’s just scratching the surface. In the book, I expand on more blunders, such as thinking that deferring taxes on retirement funds saves you taxes; thinking IRAs and 401ks are the best ways to save; and letting your money sit in a 401k or IRA if you don’t need it.
I also weigh in on why you shouldn’t think retirement’s the time to coast or wait to do what you always wanted to do.
I also have a second e-book, “Create Your Own Economic Stimulus Plan: Save Yourself, Because Big Government Can’t.” In it, you’ll learn about the 31 F.L.A.V.O.R.S., or Fortunes Lost Amidst Valid Optimization and Reallocation Strategies.
Where do you want to be at 65? Left with not enough and worried about tomorrow, or having the time of your life in “The Land of Peace and Abundance?”
*Life insurance policies are not investments and, accordingly, should not be purchased as an investment