This week a lot of the retirement news involved gigantic, scary numbers. On Wednesday morning, the crew on CNBC's Squawk Box broke the news that American workers are $6.6 trillion short of what they need to retire. That number assumes a 3 percent rate of return on assets, no changes in pension coverage and no increases in the full retirement age for Social Security.
The $6.6 trillion figure is attributed to a study from Boston College's Center for Retirement Research, according to news accounts. So I went to the college's website looking for the study but found another, about Social Security's Financial Outlook. The big number in there: $5.4 trillion. That's one measure of Social Security's financial shortfall over the next 75 years. When the shortfall is projected to infinity, it amounts to $16.1 trillion.
We've seen trillion-dollar figures bandied about so much in recent years that they begin to sound like plausible numbers. But a news article I read awhile back illustrates in tangible terms, the magnitude of a trillion dollars. It would take about 11 1/2 days to count to a million at a rate of one dollar a second. It would take 31.69 years to count to a billion at that rate. But to count to a trillion, it would take 31,688 years and change. That's a long time.
Overcoming the fear
These numbers are obviously not manageable. So I'm choosing to ignore them for now and focus on my golf game.
Last week, my husband and I took a much needed long-weekend break at PGA National Resort & Spa. It offers a summer getaway package that includes, among other discounts and freebies, a "complimentary" golf lesson by a PGA pro. I seized the opportunity because my game has steadily declined over the past 10 years or so.
The pro, whose name was Matt, asked me which part of my game needed improvement. (Where do I start?) I told him that my husband says I sway when I swing, to which he replied: "Lesson No.1: Never listen to your husband. But you already know that, don't you?"
"Yup," I answered.
So then he asked me to hit some balls at the driving range. I hooked three in a row, and told him when I'm not hooking, I'm slicing. He showed me that my setup needed adjustment. My wrists were too far forward, I was holding the club at a 45-degree angle instead of in neutral (perfectly perpendicular to the ground), and my club face was closed instead of in neutral (facing forward). On top of that, as I swung the club, I was shifting my weight incorrectly, from my left to right foot instead of vice versa, basically fighting myself to advance the ball.
Transferring the weight
This same observation can be made about my investment portfolio, which is, shall we say, not poised for growth. Right now I have about a third of it in equities and the rest of it in a money market fund earning next to zilch. After restoring my portfolio balance to pre-crash levels by following Warren Buffett's advice in late 2008 and buying stocks in the face of the growling bear market, I bolted out of stocks early this year, when the market hiccupped a bit. But by the first of September, after the August downdraft, I had an urge to start deploying the cash again. But then I got busy with other stuff and forgot about it.
So that is my next order of business: focus on retirement planning by getting the portfolio back in line with long-term goals.
I also plan to spend more time on the driving range practicing my new swing.
What about you? Do these trillion-dollar figures haunt you? Or are you focusing on what you can do to improve your chances of retiring without a shortfall?
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