We’ve been working on a review of different retirement blogs out there and i was all set to post it today when i read this story in the Wall Street Journal yesterday. The article talks about the lack of savings on the part of Boomers (and with the exception of the people who conceived and birthed those boomers, not many are saving across the generations).
Hasn’t this always been the case, though — the vast majority of people don’t save. We have loads of commentary on how WWII vets and depression-era folks saved and retired nicely… But is that really true or is it true that only a handful of people truly retire without having to work in their later years. I think older generations have been thriftier, but that was a different world. I could not prove this out, but i think as many other authors have pointed out — the world is flatter and spinning faster on its access. That changes the rules. And investing and saving have been changed, and arguably, made more difficult in a more complex world.
In this WSJ article, many people commented and its quite interesting to note the differences in tone, attitude, understanding. All in all, i think it is now and has always been a small percentage of the population in any generation that truly retires and does not have to work in some way. That will continue to be true in a Boomer’s lifetime and future generations’ lifetimes. You have to do some pretty aggressive and pretty smart investing to get to the retirement finish line.
I think what we’re trying to say here complements some of this study’s thinking — which is this: saving and retirement and working later in life will demand more active and intelligent investing. A solo 401k — that is, a self-directed retirement, is one of the only ways to achieve this (in my mind). Yes, there are some risks with directing your own retirement, but man, are the risks great in just leaving it in the hands of your company pension (which may disappear) or hoping for Social Security. Self directed retirement is the future of retirement planning.
The WSJ article is writing about a McKinsey Consulting study on Boomers and Aging (and Saving). The article and study go much deeper than this blog post, of course! And the core premise is the impact that the boomer decisions are having on our economy.