About half of those now aged 56 to 62 are at risk of not having sufficient retirement income to pay for basic retirement expenses and uninsured medical expenses, according to the study.
The study also found lower-income retirees are most likely to run out of retirement savings after 10 and certainly 20 years of retirement, and higher-income retirees are least likely to run out of money.
In fact, retirees don't run out of retirement income. As they age and wind down their assets, they reduce their standard of living dramatically.
In other words, people do not completely run out of money even though the studies say that retirees will. They take action either to spend less or to go back to work to earn more retirement income.
Other research found that about 65 percent of American households are at risk of not having enough retirement income to maintain their living standard in retirement.
Both studies assume that people will retire at age 65.
That is not likely, however. Many Americans are forced to retire earlier and most even if they want to work later cannot find a job in retirement. So before you make your retirement speech, include your spouse in your retirement plan, have some fun at work, and start saving big time - at least 30 percent of your income as I have been doing to insure that my retirement plan is sound.
Plain and simple: Saving a lot more money and reducing your standard of living now might be the only way to be reasonably certain you will enjoy any decent standard of living in your retirement and be able to write letters about the joy of not working.
Some retirement quotes to put things in perspective:
- People who don't respect money don't have any.
— J. Paul Getty, Billionaire Oil Tycoon
It is better to have a permanent income than to be fascinating.
— Oscar Wilde
Money will appear when you are doing the right thing in your life.
— Michael Phillips
One week into retirement, you'll be so damned bored that you'll want to stick bicycle
spokes into your eyes. You'll probably opt to look for another job or start another company. Kinda defeats the purpose of waiting [for retirement], doesn't it.
- Timothy Ferris in The 4-Hour Workweek
Teacher's Retirement Motto: I Used to Teach. Now I Have No Class.
— Unknown wise person
I have retired, un retired, and retired again all in the past 10 years.
— Unknown retiree
The Ideal Retirement Plan: Marry an old rich broad and wait for her to die.
— Ivan Wilson (commenting on an online article about retirment.)
It [retirement] was absolutely boring. You can't go and say, 'I'm retired now. That's it!' It won't take long and you're really gone for good and someone throws the last shovel of dirt on a coffin with your name on it. That's the moment you're really retiring — when you die.
— Ozzy Osbourne