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Is $500K the magic number?

By Barbara Whelehan ·
Saturday, May 4, 2013
Posted: 6 am ET

If you have a half-million dollars or more, your outlook on retirement is likely sunnier than if you have less, according to a survey by Maritz Research, a marketing consulting firm. The company conducted an online survey of 500 recent retirees -- those who retired within the past three years, as well as 500 near-retirees -- those who plan to retire within five years.

Among those who have not yet retired, just 35 percent who expect to have assets of at least $500,000 worry about having enough money to last through retirement, compared to 54 percent of near-retirees who have less than that amount.

Those who already have retired within the past three years seem to feel more secure overall, with 20 percent of the more affluent concerned about having enough to last through their lifetime. Nearly twice as many retirees who have less than $500,000 (39 percent) expressed concern.

What you should know about social security benefits"Recent retirees are more optimistic regarding their financial security than near retirees, perhaps because they have made decisions and removed the uncertainty," according to the study.

Nearly two-thirds of retirees work with a financial adviser, and most of them hired one before they retired. More than half of the imminent retirees (57 percent) work with an adviser now.

Conquering retirement jitters

Even though I'm a generally positive and hopeful person, I sometimes get the retirement jitters -- that feeling of anxiety that accompanies the thought that no matter how much my husband and I save, it won't be enough. It's an occupational hazard. I read retirement news all the time, and am hyper-aware of all the warnings coming in about the need to have an extra quarter-million dollars for health care costs, in addition to a colossal nest egg that will last 30-odd years.

To calm my nerves, I meditate, take long walks at night and practice yoga. But probably the most worthwhile action my husband and I took recently was visiting a Certified Financial Planner professional to get a retirement-readiness assessment.

She ran our numbers through various scenarios and Monte Carlo simulations, which attempt to account for all the unpredictable stock market moves that can happen over the years. The upshot: The worst-case scenario is that we'll run out of money when we're in our 80s. The best case scenario has us leaving a significant legacy for heirs.

That's the problem with not knowing all the variables such as market returns, inflation rate, how long we'll live, how well our investments will do, how our health will hold up, etcetera. Uncertainty fuels retirement planning angst.

Even so, since that meeting, I feel pretty good about our prospects. But when I make the transition from near-retiree to already-retired, I suspect I'll feel even better.


Follow me on Twitter: BWhelehan.

Barbara Whelehan is a co-author of "Future Millionaires' Guidebook," an e-book for Gen Y written by Bankrate editors and reporters. It is available at Amazon, Barnes & Noble, iBookstore and other e-book retailers.

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tunaTHEbig tuna
June 08, 2013 at 10:00 pm

how many retirees traded their commonsense for the obammama promise of

lower prescription costs etc


the stats said they voted for him

NOW ahahahhaah the truth is coming out




no way

$3,000,000 will only get you 30k /year

as Bernake via the socialist dictates , keeps those rates low

and when they explode!!!??

Dr J
June 07, 2013 at 5:32 pm

WOW! What a terrific insight! If you have more money, you feel better about retirement! The next question is, what in the world convinced any one that this is a news story. The idiot writer, yes, but beyond that????

May 29, 2013 at 9:14 pm

Does this 500K number have any significance when one is getting 3 pensions and 2 social security payments (wife's included?)

May 29, 2013 at 8:48 am

So, having more than 500k for retirement is better than having less?
Thanks for the insight.

May 22, 2013 at 2:27 pm

Taking long walks at night is risky behavior, given all the criminals (plus 12 million illegal immigrants) wandering around. For a person thinking of retiremment planning, the first rule is to be there to retire.

May 20, 2013 at 10:47 am

in about twelve seconds, I suspect that Clued In could have run some quick math - $500 million, 350 population, about a buck and a half per head - yep, that makes sense. My goodness, think man, think!

May 19, 2013 at 9:05 am

20 I want 2 retire

May 18, 2013 at 6:39 pm

"If you have a half-million dollars or more, your outlook on retirement is likely sunnier than if you have less,"

And this is news?

I'll add for free: If you have a cool million your outlook for retirement is likely sunnier than if you have less.

May 18, 2013 at 2:45 pm

And below is a fool who thinks writing off business expenses, which every self-employed person or company gets to do, is a "handout." Oil companies have a profit margin of about 4%, while computer companies have a profit margin of 22%, and Bill Gates (not an oil man) is the richest man in the world (again). Bill Gates gets to write off his business expenses.

Doing away with the write offs would raise the price of gasoline by about $1.50 a gallon and send the country into a crushing depression instead of the current slow-motion one.

Companies making money is not the problem. Oil companies pay more in taxes than they make in profit. Govt overspending is the problem, and taxes can't be increased enough to catch up.

When you tax an economy by more than 20% of GDP, the ecomony contracts due to lack of capital, which lowers tax revenues back to 20%.

Large systems are self-correcting, and this one is correcting now. This will last another 10 years or so, and there is no free lunch or easy way out of too much debt.

Oh My
May 18, 2013 at 12:32 am

Not sure where Clued-In is coming from with that $500 million figure, but you shouldn't just make stuff up like that. In 2010, entitlement spending was 2.2 trillion dollars (Bureau of Economic Analysis). That's actually 55 times higher than the alleged tax credits allowed to all oil companies combined. Since Clued-In was off by a factor of 4400 on entitlements, that made me suspicious of the "tax credits" claim. To put it in perspective, just three oil companies, Exxon, Chevron, and ConocoPhillips, paid $60,000,000,000 in income taxes in 2012. Allowing tax deductions to encourage domestic research an development by the top tax paying and productive companies in the world seems to make sense to me. Labeling that a handout says more about one's politics than it does about the policy.