Color of Money: Dreaming of retirement? Don't forget to plan.

Michelle Singletary on

WASHINGTON -- The go-to strategy to encourage people to save for their retirement years has been to frighten them with the numbers.

The average cost of retirement is more than $700,000, according to a study released this year by Merrill Lynch. If you want a swanky retirement, you'll obviously need more. Fidelity Investments estimates that health care and medical expenses alone will total $275,000 for the average 65-year-old couple retiring in 2017.

And then there's the scariest number of all. If you retire at 65, you could live another 25 years. The horror: You could outlive your savings.

This scared-straight approach is supposed to make us save more. But as television host Phil McGraw likes to say, "How's that working for you?"

It's not.

Despite dire reports of a looming retirement crisis, many households have little if anything saved. A GoBankingRates survey found that 55 percent of Americans have put away less than $10,000 for retirement.

"Ninety-two percent of working families have retirement account balances that do not meet recommended savings targets," wrote researcher Nari Rhee in a report for the National Institute on Retirement Security. "The 'American Dream' of retiring after a lifetime of work will be long delayed, if not impossible, for many."


Don't be, says Chris Hogan, a former debt collector, banker and now financial coach for Ramsey Solutions.

Hogan's tactic is to motivate not intimidate. His book "Retire Inspired: It's Not an Age, It's a Financial Number" (Ramsey Press, $24.99) is the Color of Money Book Club selection for this month.


swipe to next page


blog comments powered by Disqus

Social Connections


Marvin Archie Long Story Short Fowl Language Baby Blues Dustin