RETIREMENT: Consider how much to save

Are you saving enough to fund your retirement lifestyle?

Retirement planning

In a recent Scottrade Inc. survey, 60 percent of respondents said that saving between 6 percent and 19 percent of income annually is a good idea. However, fewer than one-third said they were saving that much.

Still another survey from the Center for Retirement Research at Boston College reports that a 25-year-old earning an average salary should be saving 12 percent; that savings number jumps to 18 percent for a 35-year-old and a whopping 31 percent for a 45-year-old. Daunting numbers to say the least.

Reasons for the savings shortfall are like grains of sand at the beach, too many to count, and tiny enough individually, but cumulatively, really messy.

The temptations of modern consumerism, with new tech gadgets beckoning us, while the new car our neighbor just bought provokes us, and those new designer shoes we just can’t live without. More recently, the financial crisis has created a lack of trust and confidence in the very institutions that we once relied on as bastions of economic security and safety.

A decade of essentially no return in the equity markets, combined with little or no yield in “safe assets” like bonds or CDs, forces us to reconsider committing new money to the uncertainty of those vehicles. Is it because of the loss of income, being forced to accept employment in a lower-paying field or position, simply to pay the bills? Many are also faced with staggering debt loads — student loans, large mortgages, and credit-card balances as a result of the “emergency” created during the recession. Perhaps you are caring for aging parents or have a college graduate forced to return home and who is now soaking up needed retirement resources.

My mentor always told me, “Nobody is willing to pay the price if the promise of the future isn’t strong enough.” Is your future worth the price?

The best way to overcome these obstacles to securing your ideal retirement is to first get a very clear understanding of what retirement means to you. Picture it very clearly in your mind. Where will it be? What will you be doing? Feel the joy of each new morning in paradise, with time to do what you want, and no stress or worries. No deadlines and no boss asking you for your “XYZ report.” Get very emotional about this vision.

Imagine feeling the warm sun on your face, the breeze on your skin, the sand on your feet.

Next, you must be serious about your planning.

If market upset and worry is paralyzing you, consult with a competent retirement planner, one who knows the difference between knowledge and wisdom.

Strategies exist that will provide you guaranteed income, often adjusted for inflation, with absolutely no market risk. Yes, you read that correctly — guaranteed income, often adjusted for inflation, with no market risk. Additionally, these income streams can be guaranteed for the joint lifetimes of you and a spouse.

The reality is, you don’t have to depend on market-driven outcomes for your peace of mind in retirement, and thus you can eliminate the fear of making the wrong investment. You don’t have to stress about bad timing, choosing the wrong mutual fund or the wrong mix of stocks and bonds. You don’t have to worry about what the S&P 500 will do this week, this month, this year, or the next five years; it simply doesn’t matter.

Once you are aware of some of these prudent, nonconventional retirement strategies, you can begin to feel confident about saving, about potentially sacrificing today’s short-term gratification for a more certain and rewarding retirement lifestyle. What’s holding you back?

Darren Vilardo is an independent financial adviser specializing in retirement income planning, and the owner of Inland Retirement Advisors in Rancho Cucamonga. Vilardo can be reached at 888-944-6266.

Darren Vilardo

Retirement Planning