My grandma (GG) passed away a few years ago at age 95. She was a strong independent woman who had a flair for fashion. GG loved to wear gold and silver and regularly matched her sneakers to the rest of the outfit. The woman had more style in her pinky than I have in my whole body.
However, with all her style and grace, GG passed away without a cent in the bank.
She had two things working against her that I want to share with you today.
GG spent her retirement shopping. Maybe from growing up during the depression or watching her siblings and parents pass away from various illnesses, she was using Retail Therapy to occupy her during the day…
Retail therapy is shopping with the primary purpose of improving the buyer’s mood or disposition. Often seen in people during periods of depression or stress,
I don’t really know….All I do know is that she always looked great.
The second thing working against her was out of her control and she would complain regularly about this.
Are you ready…
She was living tooo long. She had outlived her money.
Yes, my grandma regularly complained that she was ALIVE. They retired around 60 and my grandpa passed away when he was 78 and the little money they saved was long gone and she was living on a small pension and social security.
My grandma’s struggle was not unique and sadly all across the country people are undersaving and outliving their retirement.
Studies show that most Americans worry that their savings will fall short in retirement. It’s a reasonable concern. The average household spends more than $40,000 per year in retirement, according to the Bureau of Labor Statistics, yet the average person only collects less than $17,000 in Social Security payments. www.cnn.com
When the first pension/social security was created in 1889 by Otto Von Bismark people were able to retire at age 65 and typically died by 70. 5 years!
My grandma retired at 60 and passed away at 95. 35 years!
This is why saving for retirement has to be the number #1 financial priority in your life.
- You’re 25 and you just started working, saving for retirement must be #1.
- If you’re a young couple with kids and you care about their education, saving for retirement must be #1.
- You’re having a midlife crisis and want to buy a sports car, vacation home, or a boat, saving for retirement must be #1.
Rant!
This is why it’s important for you to max out your company retirement plan. Make sure you are getting ALL the company match available to you. If you don’t have access to a company plan then more of the saving falls on your shoulders. That is not an excuse to give up!
Fund your Traditional IRA. If you can, fund a Roth IRA. After all of your retirement accounts are filled, open up an additional investment accounts.
You should prepare for a 30-40 year retirement or plan on working longer. The more time your money has to grow the higher the chance of financial success. Or, if you draw down on your assets for less years, the higher the chance of financial success.
But you need to have a plan.
I hope we all live as long as my beautiful grandmother did, but let’s plan today so that your bank account can last as long as you do!
-Jared
