“Save Less and Still Retire with Enough" – Or Not

That New York Times article Jim Gust called to our attention last Saturday was still on the Times list of most e-mailed articles this morning. The "eat, drink and spend merrily" approach to retirement planning must be gladdening the hearts of Boomers from coast to coast.

Before they stop investing, though, they might want to check the research.

Boomers who didn't skip statistics class can check out the study done by Professor Scholz and two others here. Turns out, as suggested in a comment to the earlier post, the study examines Depression Babies, a relatively small generation that could hardly help but prosper in the post-WWII years.

More disturbing, even to a non-statistician, the study seems to embody unsettling assumptions:

• Low-income workers won't hope for a better life but will be content to retire on little but Social Security.

• Middle-income workers will be OK in retirement thanks to their defined-benefit pensions. (The study goes back to 1992, remember. Wonder where some of those pension plans are now?)

• Home-owners will move to apartments and live it up on the massive profits from the sale of their homes.

We'll doubtless be hearing much more on the subject of financial independence at retirement. Stay tuned.