Saving For Retirement � A Challenge For Paychecktopaycheck Employees

Allow me, if you will, to offer the following definition of retirement. Retirement is the state of having separated from one's paycheck-to-paycheck job. The "paycheck-to-paycheck" description is important. The majority of people who retire to incomes lower than their pre-retirement levels are paycheck-to-paycheck employees. Chances are, since you're reading this article, you're one of the paycheck-to-paycheck people.

Let's say this is you: You've got a decent job, maybe a good one. Most of your paycheck is being eaten up by life's necessities, but you manage to put away as much as you can into your 401(k) retirement plan. Retirement is looming in the not-too-distant future, and the prospect for accumulating enough savings or investments that will equal your present income by retirement age seems very bleak indeed. Still, you get serious about saving for retirement. You might even engage the services of a Certified Financial Planner. Part of your plan is based on maximizing Social Security benefits. Now what?


Financial planners rarely, if ever, plan for you, the client- retiree to retire financially independent (with the exception of the few high income clients). What most financial planners don't tell you is they target a 20-35% decrease of income to you in retirement. The decrease may be as high as 50%! That's not a knock on financial planning or financial planners. Most of them are doing the best they can with what they have to work with. There generally is simply too much month at the end of each paycheck for most people.

Herein is the age-old problem: Most people in the United States of America, I repeat, do not earn enough money to live comfortably during their pre-retirement years and retire comfortably as well. That means any financial planning you do is being done to target a decrease in your living standards by 20 to 50 % in retirement!

Remember, you do not have to live on less in retirement. No matter where you are right now financially, you can build and enjoy a retirement lifestyle you desire. Peace.