Money Magazine: "Retirement Savings: Will $4 Million be Enough??" [View all]

[HughBeaumont]

http://finance.yahoo.com/news/retirement-savings-4-million-enough-195700684.html

One more issue that goes to the heart of retirement planning -- how do you know whether you're saving enough to give yourself a realistic shot at a secure retirement?

You hope to have $4 million socked away by the time you retire in 30 years. But what does that figure represent? Is it the amount you project having based on how much you save and what you expect your investments to earn? Is it the amount you think you'll need to maintain your pre-retirement lifestyle?

It's hard to get an accurate fix on how much you'll need to save for a retirement that won't begin for several decades. There are a lot of unknowns -- how much you'll earn in the future, what sort of lifestyle you'll lead over the next 30 years, how long you'll live.

You may not be able to save as much as you envision due to layoffs or higher-than-expected living expenses. Your investments might not earn what you expect. You could be forced into retirement earlier than you wish by health problems or a "rightsizing" at work. No one can foresee how things will shake out over the next 10 years, let alone the next 30. By going to a tool like our Retirement Planner or T. Rowe Price's Retirement Income Calculator, you can make some reasonable assumptions about how much you'll need for retirement, how much you should save and how you should invest. From that, you can get a sense of your chances of achieving a secure retirement.

Walter, four million might as well be four BILLION to about 95% of us. Realistically tell me HOW someone that makes a flat, never changing-in-real-dollars wage of 50-70 thousand a year (if wage trends since 1979 tell us anything) is going to be able to save/compound $4 million in 30 years. Is this person the luckiest commodities trader/stock picker/human being on earth? Plans like this only work if you have no life landmines. AT ALL.

You have to have the right career that makes green out the yin-yang, you can never have a layoff, you can never have a bad financial emergency, you can never have student loan debt, every financial move you make, every buy and sell and shift to cash and entrance - every move has to be the RIGHT one.

That pie-in-the-sky annual rate of return they assume in most financial self-help books isn't happening with regularity in a laissez-fail Boom-Bubble-CRASHfest known as the American economy.

America is no longer time accommodating if a "Plan B" means a relatively quick career switch. We no longer have plants or factories hiring for a living wage on these shores.