A peanut butter and jelly sandwich

By Kerry Hannon nytimes.com   Article

Rethinking Retirement for Longer Lives With Fewer Safety Nets

“Five days a week, Kim Moske makes a peanut butter and jelly sandwich and brown-bags it to work. ‘I’ve been doing that for 30 years and saving what I would have spent eating my lunch out someplace,’ she said. … That is a small gesture, but it is indicative of the advantages of making daily choices to help save for a financially secure retirement.

Ms. Moske, 56, lives in Delaware, Ohio, and is a project manager for a small manufacturing firm. … She started to save and invest in her late 20s. … ‘My father worked very hard his entire life and made a good income, yet he died penniless at age 78,’ she said. ‘I’m frugal to a fault. Therefore my retirement is in pretty good shape.’ …

When Ms. Moske was 26 and working full time to pay her way through college, she signed up for a class on finance and investing. ‘I didn’t know a stock from a cornstalk, but I realized that I needed to take control,’ she said. ‘My husband and I immediately started living on less than what we needed, saving and investing.’ …

Then, six years ago, her husband died from injuries sustained in a fall. That caused a seismic shift not only emotionally, but also financially, as she had to live on one income. … I meet with a financial planner once a year to make sure I am on track, and I check retirement calculators all the time.’ In many ways, she is an anomaly.

‘Work More, Save More or Both’

… ‘Nearly half of families have no retirement-account savings at all’  … The median retirement savings figure among all working-age families in the United States is just $5,000; the median among families with savings is $60,000.

… 55 percent of American households risk not being able to cover essential expenses like housing, health care and food in retirement. … ‘We are now living longer and have to recognize that we either have to work more, save more or both’ ….

‘The 65 retirement age for Social Security was put in place in 1933 when retirement lasted eight to 10 years’ … ‘In the old pension system, people didn’t have to make decisions on how much to contribute to a retirement account, which investments to grow their nest egg, how big of a nest egg they would need, what to do with the nest egg when changing jobs and how much to withdraw on an annual basis in retirement.’ …

It is essential to get a “snapshot of your financial picture ASAP’ …. For example, how much have you already saved for retirement? How much are you saving annually as a percentage of your income? Can you bump it up? How is it invested? Have you used a retirement calculator to run the numbers? Have you worked with a financial planner to help you create a blueprint?

Even people who save conscientiously, he said, are not necessarily paying close attention to the details of the financial products they purchase, investment fees, planning for health care in retirement, inflation and other factors that will affect their future.”

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