I’m not going to the FinCon financial bloggers conference this year, but the steady flow of news from participants makes me feel like I’m there after all. One of the events associated with this year’s event is the The Retiree Next Door, a survey and e-book about the realities of being an American retiree in 2014.
The e-book is free; you can get a copy of it here.
The research is interesting, and a little reassuring: there are successful retirees, defined as those satisfied with their standard of living. Of those surveyed, 35% were employed by a large company and 20% were employed in the public sector. More than half followed a budget while they were working, but only 30% said that they lived frugally. They did most of their retirement savings in their 40s and 50s; 51% had no retirement savings in their 20s and 30s, and another 42% didn’t save money in their 60s, presumably because they were comfortable with their position.
Most of these people made their own investment decisions, although with the occasional help of professionals, and most used IRA and 401(k) accounts. The biggest regret most people had was bad stock market investments (23%), followed by bad real estate investments (13%).
The good news? It is possible to retire, and the FinCon surveyors found over 500 people who had. It’s easier if you work for a large company or a government employer, but it is hardly impossible. You don’t have to start saving in your 20s, but you do have to start saving.
As for the investment disappointments, both fit a lot of anecdotal and statistical evidence. It’s very hard to time the stock market, but the stock market is the best long-run investment for most people. The solution is to buy a simple low-cost mutual fund and don’t trade it. As for real estate, in the long run, its returns should match inflation, and you end up with a rent-free place to live. If you don’t get cute trying to be Donald Trump, it’s a decent investment.
