Live Long and Prosper?

Can we ever retire?

It used to be that a million dollars was a lot of money. Save a million before you retire, use the interest to supplement Social Security, and you were set. But that was before ultra-low interest rates, extended lifespans, and aggressive healthcare inflation. Now a 65-year old couple with a million dollar nest egg that spends 4% per year has a three-quarter chance of outliving their funds.

But that’s not the real problem. The real problem is that most people don’t have a million dollars. The median household retirement account for Americans between 55 and 65 is $120 thousand. So, with Social Security, the average household’s retirement income will be—around $45 thousand. That’s around half of what the average household makes. So a lot of people are in for a big surprise when they realize that a lifetime of work will have prepared them for—a working retirement.

Given the choice between saving more or spending more, Americans opt to spend. The solution is to save more. But I sure don’t want the government doing it for me.

Douglas R. Tengdin, CFA

Chief Investment Officer

By |2013-06-11T11:18:07+00:00June 11th, 2013|Global Market Update|0 Comments

About the Author:

Mr. Tengdin is the Chief Investment Officer at Charter Trust Company and author of “The Global Market Update”. The audio version of each post can be heard on radio stations throughout New England every weekday. Mr. Tengdin graduated from Dartmouth College, Magna Cum Laude. He received his Master of Arts from Trinity Divinity School, Magna Cum Laude and received his Chartered Financial Analyst (CFA) designation in 1992. Mr. Tengdin has been managing investment portfolios for over 30 years, working for Bank of Boston, State Street Global Advisors, Citibank – Tunisia, and Banknorth Group. Throughout his career, Mr. Tengdin has emphasized helping clients manage their financial risks in difficult environments where they can profit from investing in diverse assets in diverse settings. - Leave a comment if you have any questions—I read them all! - And Follow me on Twitter @GlobalMarketUpd

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