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VOL. 129 | NO. 15 | Thursday, January 23, 2014

Dana and Ray Brandon

You Can Save Too Much for Retirement

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Ray’s Take Around half of all workers older than 55 have less than $50,000 saved for retirement. We hear this message over and over along with warnings that many Americans may never be able to afford to quit working. Some respond by effectively giving up hope. Others keep saving, but live in constant anxiety that it probably won’t be enough. They may be fine and not even know it!

It is important to face the truth – good or bad – by determining what you do need to be saving. There’s a common rule of thumb for determining just how much money you need for retirement – and plenty of online calculators to help you determine that magic amount. Many of these formulas assume you’ll need around 70 to 80 percent of your working salary to fund your retirement lifestyle, along with investments that at least keep pace with inflation, and enough funds to live on for 30 (or more) years.

Of course, this is a generic formula and does not apply equally. If you’re currently seeing a large portion of your income go to day care, private school tuition, or a large mortgage; the percentage of your current income you’ll need for retirement may be lower. On the other hand, if you intend to travel the world in style when you retire, your post-retirement income needs could be substantially more than your current income.

Retirement is by far the largest investment you’ll ever make. It takes careful planning and shrewd investments. However, you also need to start with a clear goal so you’re not just saving for retirement at the expense of everything else.

Don’t secure your future at the cost of short-changing the rest of your life. It’s a balancing act. Without the right strategy and guidance, you could tip things in the wrong direction. Finally, once you face the beast and deal with retirement, don’t forget to go back at least once a year and see how you’re doing.

Dana’s Take Saving money for retirement can provide more comfort and more options. Quality of life in retirement, however, is not always determined by dollars saved. Community and activity can make the years better regardless of your bank balance.

Wealth without health is not much fun. Choose activities that promote health while building community. Volunteering at a community garden, walking pets at a shelter, and yoga classes all build health and friendships.

Retirees who serve their community reap rewards in social contact plus wellbeing from helping others. Choir, worship and prayer have soothed souls for centuries. Faith-based groups provide countless fellowship activities that feed the spirit while building a network of support.

Retirement can be the perfect time to pursue a purpose-driven life – on any budget. Adding life to your years can add years to your life.

Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com.

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