Retirement Blog

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Periodically, the Employee Benefit Research Institute, a think tank, puts out some report about how retirement incomes are going to be too low or health care costs  too high for retirees. The message seems to be that because of poor retirement planning, most of us are going to be living in cardboard boxes before all is said and done.

Tuesday, EBRI  put out a report that projected 64 percent of workers currently earning less than $30,000 per year will run out of money within 10 years of retiring. About a third of workers currently making $30,000 to $70,000 will run out of money after 20 years of retirement. One in 10 workers making more than $70,000 will find themselves with a case of the shorts after 20 years.

The reality is that currently, most people who live in retirement don't have a lot of income. Here, according to the 2007 Census, is the total income for households age 65 and older in the U.S.:

• Under $5,000 (2.4 percent)
• $5,000 to $9,999 (7.7 percent)
• $10,000 to $14,999 (13.3 percent)
• $15,000 to $19,999 (11.4 percent)
• $20,000 to $24,999 (9.3 percent)
• $25,000 to $34,999 (15 percent)
• $35,000 to $49,999 (13.7 percent)
• $50,000 to $74,999 (11.9 percent)
• $75,000 to $99,999 (6 percent)
• $100,000 and over (9.3 percent)

As you can see, only about 15 percent have incomes greater than $75,000 and 35 percent have incomes that are less than $20,000. I think my fellow blogger here at Bankrate.com Barbara Whelehan has the best response. "As long as I get air conditioning in my cardboard box, I'll be OK," she says.

Don't get me wrong, retirement planning is important. As we live ever longer, figuring out how to afford the good life  is only common sense. But don't forget as you evaluate your situation, a lot of "experts," including the insurance companies that fund the EBRI, are lining up to make money off of boomers' preretirement angst.

Evaluate carefully the flood of advice coming your way and be skeptical about the motives of the advisers, especially when it's clear that they'd love to get their hands in your pocket.