Old age gives itself plenty of warning. First there are the milestones of life: college, marriage, first child, next children, first child goes to college. Then there are the signs of decay: hair loss, failing eyesight, memory lapses, aches and pains. These happen well before falling and not being able to get up.
And we hear about retirement all along the way. We hear about retirement planning: how to save, in what, how much, and for how long. We hear from retired folks. At the very least, we know some retired folks. If we pull down any kind of salary, we likely have means through our employer to use a 401(k) plan.
With this much warning, if we didn't arrive there prepared, what excuse do we have?
This article by Dave Carpenter suggests that there are many people entering their 60s very ill-prepared for old age, yet expecting to retire or at least severely dial back their work schedule. Mr. Carpenter reports on a gentleman who was laid off about a year ago from a six-figure sales job. How much does he have saved up? Only $5,000. He will start drawing Social Security in April, at age 62. He rents an apartment.
He blew it. (The article says that he knows he blew it.) What kind of retirement is he going to have? Will it even be a retirement?
Michael Mihalik, author of Debt is Slavery: and 9 Other Things I Wish My Dad Had Taught Me About Money, emphasizes that retirement is about money, not age. There's nothing magical about age sixty-five, sixty-two, forty, whatever. You either have the money saved up to support your desired standard of living until the day you expect to die, or you don't. If you end up with too much life at the end of your money, you're either dependent on others, or you exit retirement.
There really isn't much more to it than that.
Make sure your retirement savings is on track before you arrive at your sixties with only $5,000 to rub together. Don't blow it!
(Hat tip to Sustainable Personal Finance for including this post in the Carnival of Personal Finance.)
It is hard to imagine someone with that salary history not having any kind of savings or property.