For years, we have discussed when money is needed to be able to achieve a relaxed retirement, and some have put several numbers. Some people say you should have at least $800,000, others say the magic number is $1,000,000, but marketer and CPA Dan Geltrude has a bigger number in mind: $1.5 million.
In a recent interview with Fox Business, Geltrude launched that number on the air and generated a stir: many began to question whether you really have to have that dantesque amount of money to be able to go for retirement in peace, or if it is somewhat exaggerated. “You want to start investing as early as possible because compounding time is on your side, so start early,” he said Monday on FOX Business’ “Mornings with Maria.”
The Key for a Wealthy Retirement: Diversify Your Investments
Geltrude emphasized about the importance of diversifying investments, when thinking about putting together your savings for retirement. The key is to distribute the risk, since having all the assets in one investment can be risky.
What happens if that investment doesn’t go as planned? You’ll be in severe risk of losing your money. In addition, you need to be clear about your financial goals. Are you thinking about saving for retirement? Or maybe for a university education? The purchase of a home…?
Buying time is an advantage when you are young. The philosophy of starting to invest is similar to the idea of planting a tree. What is the best time to do it? Twenty years ago. The next best time is today, which means it’s never too late to put your money to work for you, he explained further in the interview.
Geltrude warned that relying solely on Social Security will not be enough to guarantee a comfortable retirement. He emphasized the alarming figure of $1.46 million needed for a comfortable retirement, an even higher amount than the previous year’s $1.27 million.
Actual Retirement Savings Are Far from the $1.46M Goal
Unfortunately, the average American’s savings are far from reaching that million-and-a-half dream: the average savings are $88,400, about $10,000 below the $98,800 it averaged in 2021, according to a recent study. In all segments, the gap between what people think they will need for retirement and what they have saved is massive.
The issue is inflation, which has expanded the expectations of retirement savings, and has put pressure on the future planning of American workers and foreigners with legal residence authorized to save for retirement in the US. As inflation raises the cost of retirement, a decline in traditional methods of saving is observed among Americans.
Pension plans, widely used until the 80s, have practically disappeared today. Although Social Security accounts for approximately 90% of the income of more than a quarter of senior citizens in the United States, its trust fund faces a projected deficit for the next 75 years and is anticipated to run out towards the middle of the 2030s.
This underscores the importance of pursuing savings alternatives and retirement planning strategies, as uncertainty about the long-term viability of Social Security poses significant challenges to retirees’ financial stability.
