The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work, and Living

Chapter 1. Rethinking Retirement in Hard Times

The timing couldn't be worse: The largest generation in our history is approaching retirement age during the worst economic downturn since the Great Depression.

Before the economy crashed, many baby boomers had been holding on to vague notions that retirement would somehow work itself out through their good luck in real estate, in the stock market, or by inheritance.

Whatever the reason, most Americans before they retire have paid little attention to the huge life transition that is coming. We don't have a good idea of how much we need to save for retirement; only 44 percent of workers responding to one survey said they had tried to calculate what they would need, and an equal number simply "guess at how much they will need" for a comfortable retirement.^[1] Another survey of Americans 56 to 65 years old showed that almost half of the respondents underestimated the amount of retirement income they would need, and nearly 70 percent overestimated how much they could draw down from their retirement savings annually.^[2] Sixty percent underestimated their odds of living beyond a given average life expectancy. Meanwhile, about half of Americans file for Social Security benefits too early, often cheating themselves out of hundreds of thousands of dollars in lifetime benefits. Only half of all working adults participate in a workplace retirement-savings program. And the average U.S. household has managed to save just $60,000 toward retirement. ...