Worried about retirement prospects? Run the numbers!

In the long run we're all dead. It's the 25 or 30 years before departure, the retirement years, that we've really got to worry about.

Judging from what keeps popping up in one of my social media accounts, people are worried about, I don’t know — stuff, the future. Maybe their retirement prospects.

The long running meme about how you’ll be utterly unremembered in 100 years seems to have picked up steam lately. Maybe the Tik Tok generation has discovered it. I won’t repeat it here; it seems profound but only in the way of greeting card copy.

Yeah, we’re all dead and forgotten in the long run. All the more reason to make the best of the time we do have. That includes the retirement phase, the phase that in some quarters is called a crisis. Results of one recent survey has it that one in five adults over the age of 50 has exactly zero in retirement savings. That study, by the AARP, also found that 61% of such folks “are worried they will not have enough money to support them in retirement.”

The AARP study, though, doesn’t quite square with the 2024 Retirement Confidence Survey from the Employee Benefit Research Institute (EBRI). It found 74% of retirees “are confident they will have enough money to live comfortably throughout retirement.” The survey also found 72% of retirees, and 78% of people still working, worry about inflation.

The intangible, the level of worry exists in people’s heads. Retirement cash you can measure and count. The EBRI survey also examined how many people have actually calculated what they’ll need in retirement. Only half of working people and retirees have actually run their own numbers.

That’s understandable. From personal experience, I can tell you calculating your retirement income needs entails a lot of searching — of both your receipts and your soul. You’ve got to fill out worksheets, keep from kidding yourself, and nudging your financial advisor, if you have one. It requires honesty about what you blow money on now, and what expenses you could jettison if need be.

Some people might fear what the calculations will show. What if, for instance, it says you need $500,000  or $1 million in savings to go along with Social Security, but you’re 62 and only have $250,000 saved up? You might get a cold water shock, but at least you can proceed with your life in knowledge.

Luckily federal employees have one of the lowest-load, easy-to-use retirement accumulation mechanisms in the form of the Thrift Savings Plan. One of my regular show guests, Abe Grungold, lists five simple things to do or not do, to ensure you put away the maximum in your TSP account. Contribute the maximum matching about of 5% of your salary. Don’t listen to social media dopes talking about investment strategies; the fund managers have already abstracted that task for you. Avoid constantly changing your fund mix in an attempt to time the market. Don’t use your TSP funds to buy annuity instruments. Make sure you repay loans you make to yourself against your TSP balance.

Social Security, an important part of FERS annuitants’ incomes, made news with the latest report placing insolvency of the trust funds in 2033 or 2035. That supposedly means beneficiaries would start seeing their benefits cut. Politicians who let that happen would see Claude Pepper rise out of the grave and come at them with a scythe. Social Security has IOUs it can call on the Treasury to continue regular payouts. If they had guts, Congress could do a reengineering of the payroll tax and benefits- vs. -age schedules like it did in 1980, but don’t hold your breath.

It all ends up on the debt anyhow. Not to debate Social Security policy, just to say options exist to keep it going.

You and I won’t be remembered 100 years after we’re gone. Johnny Carson is largely unknown already to Generation X. Shakespeare died in 1616, yet every year you can attend dozens of Shakespeare festivals. They might even still mention him occasionally at Harvard.

Nearly Useless Factoid 

By: Michele Sandiford 

According to the USDA, California produced 92% of the citrus grown in the U.S. for fresh consumption in 2023.

Source: Citrus Industry Magazine

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