Financial Literacy - Securing retirement
Rethinking retirement in tough times

Former heavyweight boxing champion George Foreman once said, "The question isn't at what age I want to retire, it's at what income."

While Foreman was savvy enough to parlay a fading boxing career into one that made him millions selling fat-reducing grills, most of us will probably need a well-defined savings strategy if we expect to retire comfortably.

And many people still have some hurdles to overcome. For starters, we don't know how much we need to save for retirement. In Bankrate's retirement poll, 37 percent of Americans admitted that they haven't figured out how much they'll need to retire, and another 15 percent said they took a wild guess at a number.

And our savings are paltry, generally speaking. According to the Employee Benefit Research Institute's, or EBRI's, 2009 Retirement Confidence Survey, more than half of Americans (53 percent) have less than $25,000 saved, not including the value of their homes or their pension plans.

Retirement attitudes
  • Blame the consumer culture
  • Generational differences
  • Retirement savings killers:
    • Credit cards
    • Inflation
    • Changes in the landscape
    • Fear of investing
    • Inertia
  • The future of retirement

The notion of a traditional, leisurely retirement is undergoing a transformation. It's likely to happen later in our lives, and it may involve working at least part time. There's a multitude of underlying reasons for this likely outcome: rising health care costs, a dearth of traditional pension plans, faltering Social Security and Medicare systems and, most of all, the fact that Americans are just not saving enough for retirement.

Blame the consumer culture

One popular explanation for our moribund personal savings rate is the replacement of the work-and-save culture of the past with the ubiquitous spend-like-there's-no-tomorrow mentality.

"I think it's the idea of keeping up with the Joneses," says Henry "Bud" Hebeler, a recognized retirement expert and author of "Getting Started in a Financially Secure Retirement."


While consumerism is nothing new, Hebeler says in the decades following World War II, certain socioeconomic factors emerged that encouraged lavish consumption at the expense of fiscal frugality. Americans found themselves with more disposable income, for one thing, and they tended to dispose of it.

Widely available consumer credit and increasingly sophisticated marketing campaigns fostered detrimental changes in consumer spending habits over the past several decades, according to a 2008 personal savings analysis by EBRI. In more recent years, the run-up in real estate prices gave consumers a false sense of instant wealth, which deterred personal saving.

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