4 Ways the Retirement Landscape is Changing

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The following is a contribution from Joe Burhmann at COUNTRY Financial. If you’d like to contribute to Frugal Rules, please consult the guidelines and contact me.

By now, you know probably know you should be saving as much as you can for retirement and taking advantage of employer matched 401(k) contributions, but here are some surprising facts about retirement you may not know:

The Retirement Age is Getting Older


A study by Nerd Wallet found  college-educated millennials won’t  retire until they’re 73, which is 12 years later than the current average retirement age of 61. Less help from the government, exponentially growing student loan debt, and longer life expectancies will create a perfect storm for younger generations.

Of course, the only way to retire at a reasonable age is to either win the lottery or start saving as soon as possible, which brings me to my next point.

1 in 4 Aren’t Saving at All


A recent COUNTRY Financial survey found one in four Americans are not saving for retirement at all. While that percentage is higher for millennials, about 20% of Americans in each age group aren’t saving a thing.

The easiest way to boost your retirement savings is by cutting costs where you can. Then, you can boost your contribution to your employer’s 401(k) or 403(b) retirement-savings plan. It’s a great way to compel yourself to save because the money is pulled straight out of your paycheck and it’s gone before you get a chance to spend it.

If your employer doesn’t offer a retirement-savings plan, Roth IRAs can be a good way to save for retirement.  Funds accumulate tax-deferred, and distributions can be tax-free at retirement.

Similarly, automatic investment plans that deduct money from your bank account monthly and allow you to invest directly in mutual funds of your choosing are also a tool that make it easier to save for retirement. Like payroll deduction into a 401(k) or 403(b), these automatic investment plans force you to save for your future.

$2 million is the magic number


For years, experts projected $1 million to be the magic number for boomers to sock away in their retirement saving accounts. But as you plan for your retirement, remember to account for inflation and less government assistance. Most experts agree that somewhere between $1.6 – 2 million is more in tune with what millennials will need to retire comfortably.

$2 million seems like a lot, but compound interest and time make it easier to attain.  You can use this calculator to see how much you need to save annually to reach your retirement goals.

Save for retirement, not college


Many parents sacrifice retirement savings to help their children afford college – in fact, our survey told us 43% of Americans  think saving for their child’s college education is more important than saving for their own retirement, and another 11% are unsure. Community college, scholarships and grants are ways your kids can go to college without being  burdened by a large amount of debt.

Before you commit to paying for your kids’ education, take a long hard look at your retirement savings. If helping your child pay for college is going to sacrifice what you’ve saved or if it’s going to affect your quality of life as you age, it’s wise to find other ways to help them instead, such as helping them search for scholarships and find affordable education.

In a worst case scenario, you could be mortgaging not only your future for your child’s education but their future as well if they need to change jobs, move or support you in your latter years because you didn’t save enough, or anything at all, for retirement.


How are you doing at saving for retirement? Have you started or are you one of the 25% of Americans without a dime set aside for retirement? What’s more important to you – saving for your child’s college education or your own retirement?




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John is the founder of Frugal Rules, a dad, husband and veteran of the financial services industry whose writing has been featured in Forbes, CNBC, Yahoo Finance and more.

Passionate about helping people learn from his mistakes, John shares financial tools and tips to help you enjoy the freedom that comes from living frugally. One of his favorite tools is Personal Capital , which he used to plan for retirement and keep track of his finances in less than 15 minutes each month.

Another one of John's passions is helping people save $80 per month by axing their expensive cable subscriptions and replacing them with more affordable ones, like Hulu with Live TV.

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  • Stefanie @ The Broke and Beautiful Life says:

    I started planning for retirement when I was 24 by opening and maxing out a ROTH. Even with the early start, 2 million seems like a pretty daunting and far off number.

    • John Schmoll says:

      You’re off to a great start Stefanie! I know that number is daunting, but you’re ahead of the majority of the pack by starting early.

  • Gretchen says:

    Thank you for saying save for retirement, not college! With college costs at an all – time high, and retirement costs up to twice as much as they used to be it’s ridiculous to try and do it all! I’ve written about how I will not pay for my daughter’s college – and I think it will be good for her. It will teach her the value of a dollar, how to find the best college education value (read: don’t go to the most expensive school), and how to work hard!

    • John Schmoll says:

      Not a problem Gretchen! I’ve written about it before as well and think retirement needs to come first. There are no loans for retirement and while we will likely help where we can, retirement needs to come first.

  • kathryn says:

    When our 4 children were growing up, they always knew if they wanted to go to college, they would need to pay for it themselves. They would appreciate it more, if they earned it.
    Two of them considered it, then decided, the cost of the education was not worth it. They all work at jobs which pay just above minimum wage.
    I’ve always said, you can’t save your way to wealth.Of course if you are on a high wage, there are exceptions.
    My husband and I retired at age 46 & 50, four years ago. While the kids were growing up, all we did was concentrate on paying off our home, and contributing the maximum allowed each year in our RRSP (Canadian) which is like the American $401K?
    When the kids were teenagers we started using the equity in our home to use as downpayments on rental properties. Within 6 years, we had enough surplus income to quit working. We had 35 units at this time.
    When our kids moved out, we rented out the family home and moved in town. We bought a 5 unit apt building, and each of our 4 adult children and ourselves took a unit. We share the cost of everything. They will own something, instead of just renting.
    Anyone can do this. Get a group of friends or family to pool your incomes to buy a multi-unit property.You might only have small incomes, but together, they are a lot.
    Having renting properties is a continuous supply of income. Of course you need to factor in vacancies,repairs and maintenance.

    • John Schmoll says:

      I agree you can’t save your way to it Kathryn. You need to work and find ways to produce increasing amounts of income. We’d like to help our kids where we can, but help can go much farther than simply paying for something.

  • Grayson Bell says:

    I always thought $1 million was not enough, but aiming for two is even more daunting. I do love goals though!

    • John Schmoll says:

      I agree, I think several decades ago it would’ve been fine but it’s an increasingly moving target now.

  • Will Lipovsky says:

    The best gift a parent can give is to make sure they won’t be a burden to their children. Retirement should be their focus.

    I like the calculator, btw. I usually use Dave Ramsey’s

  • Ben Luthi says:

    My heart hurts when I hear those statistics. Our generation is in for a depressing future. As for the $2 million, it’s a good start, but I think everyone should do the math for themselves or work with a professional to find out what they would be comfortable on. Unfortunately, that’s too much work for some people…

    • John Schmoll says:

      I agree Ben, it is most definitely a daunting number. The key is simply starting and starting early. Unfortunately that’s not a focus for many, regardless of the generation.

  • Shannon @ Financially Blonde says:

    I think it is really difficult to wrap your arms around retirement when you see statistics like $2MM to retire. I always think the best way to plan for retirement is to adjust your lifestyle along the way. The lower you can get your daily needs, the easier it is for you to save money and make a larger retirement fund less important.

  • Andrew@LivingRichCheaply says:

    Fortunately for me my dad encouraged me to start saving for retirement with my first job…I signed up for the TSP (401k) and opened an IRA and have been contributing ever since…increasing my contribution as my income increased. I think it’s hard to say whether $1 million or $2 million is the number to aim for…it really depends on the persons situation and where they live.

  • Joshua @ CNA Finance says:

    I couldn’t agree more with this assessment. I’m definitely doing well on my retirement savings, but I waited until I was 24 to get started, so I’m a little behind the curve as far as I’m considered. Good news is, I’ve got plenty of time to catch up and I’m all over it now. Thanks for the great read!

  • DC @ Young Adult Money says:

    I recently got a promotion and as part of it we bumped up my 401k contribution amount. I think the most important thing for people my age – people in their mid 20s – is to just get started. It’s also best to have these contributions automated so you don’t have to think about them or “miss” the money that could be going to your checking instead.

  • Poor Student says:

    I agree that parents should prioritize their retirement income instead saving for college. I paid my way through college, although with a bit of my parents’ help in the beginning. It taught me a lot about life and the value of money. I guess it’s better for people to have loans when they’re younger than to work way past their retirement age because they haven’t saved up enough for retirement.

  • Daisy @ Prairie Eco Thrifter says:

    2 million is the magic number but it’s sad to think what will become of the 1 in 4 who aren’t saving at all. There is a huge difference between $2Million and $0!

  • Tom says:

    Though I have amassed respectable savings, the ongoing ravages of inflation should have people looking into retiring in lower cost jurisdictions … including outside the country for part of the year (Mexico, Costa Rica, Thailand, etc)

  • Thomas @ i need money ASAP! says:

    It’s not terribly surprising that a certain percentage of millennials are not saving for retirement given that those are probably the same ones that are still out of work. But other then those particular people there should really be no excuses.

  • Tre says:

    $2million seems really daunting. $1million used to seem daunting, but now I know how we will surpass that number.
    I have noticed that none of the millenials in our company contribute to the 401k. I’m not sure how to get them started.

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