“The Number” Just Keeps Rising?

Hello Boomers,

We recently talked about “the number”.  You know the one.  It is what you need to save to have a “comfortable” retirement.  We showed you the range of “times earnings in the years closest to retirement” that came from a study by the University of Georgia.

The study assumed that you would be able to collect Social Security and the ranges were based upon your income in the years right before retirement.  Higher incomes pre-retirement require higher savings to achieve a similar standard of living. 

Not as complicated as many of the other models out there, although they certainly did look at everything the other models look at while arriving at the multipliers.  The beauty of the study was in the simplicity of the calculation and the reasonableness of the “number”.  

While still a stretch for many Boomers, it is also possible to achieve the numbers by working and saving diligently until retirement.   After doing my own math, I felt more confident about being able to eventually retire without having to choose between paying bills and eating.

I also felt more confident in the “number” because of its source.  No profits, no agendas.  Just an attempt to arrive at what will reasonably be needed for a retirement lifestyle that is similar to the one enjoyed pre-retirement. 

There are many experts offering to help you get where you need to be.  Some are better than others.  Some are more credible than others.  Most also have something to gain so keep that in mind too when trying to find the expert to help you achieve your “number”. 

While no one can predict the future with absolute certainty, being as knowledgeable as possible and as prepared as possible is always a good thing.  Perhaps shrinking wages and falling prices are a sign that our nest eggs don’t really need to reach the stratosphere to be adequate.  Perhaps the models will change as our economy changes and the numbers will fall just as wages and asset prices have fallen.  

Or maybe not.  Perhaps the multipliers in the University of Georgia study won’t be enough for Boomer’s long-term economic security.  Perhaps other estimates will prove to be more accurate and 50-year-old Boomers will find they should have saved more – perhaps the $1,000,000 or even $2,000,000 often mentioned by financial experts.   

But has the “number” really risen to $3,000,000 as Rick mentions at http://tinyurl.com/29yyc3u ?   Perhaps I mistakenly assume that he is talking to Boomers when he speaks of simpler times during years that only Boomers and their parents would remember.   Perhaps he is really speaking to younger workers.  After all, who can reasonably predict what their retirement needs will be?  Perhaps I sense an agenda where none exists because of the purpose of his site.  I would love to hear your take on this one. 


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