It’s probably too early in the morning to comment on this article from the NY Times (slightly truncated version available from the Houston Chronicle, here), but the cognitive dissonance is too great to ignore:
Could it be possible that you are saving too much for your retirement?
[snip]
[… A] small band of economists from universities, research institutions and the government are clearly expressing the blasphemy that many Americans could be saving less than they are being told to by the financial services industry — and spending more — while they are younger. The negative savings rate, they say, is wildly distorted.
Blasphemy indeed. Count me skeptical.
When I look down the road to my (not-distant-enough) “golden years”, I see a shifting, shadowy nightmare of unknowns: aging parents (at least two of whom have no savings whatsoever), college for AC, reduced (or no) Social Security, and completely unpredictable and fearsome medical costs. Will those parents live five more years? Ten? Twenty? Will AC go to graduate school? Have trouble finding her financial feet? Will DH and/or Polimom live into our 70s? 80s? 90s? And how healthy will we be?
There’s probably no amount of money that would make me feel comfortable in the face of so many unknowns, and I find the article’s suggestions that we are over-targetting retirement extremely disturbing.
Nevertheless, the loose confederation of well-regarded economists, who have not been working in concert, say their research points to the startling conclusion that many Americans are saving too much, not too little. Indeed, their studies of the savings and spending habits of the generation born between 1931 and 1941 revealed that at least 80 percent had accumulated more than enough wealth for retirement. While they have not studied the baby boom generation as closely, they believe that the greater wealth of that generation should also leave those retirees secure.
A study last October by another group of economists, including two working for the Federal Reserve Board, found 88 percent of retirees age 51 and older had adequate wealth.
Obviously, they weren’t looking at the accounts of people I know or care about, the vast majority of whom are wayyyyyy behind this power curve.
This group of economic altruists (ahem) say that we’ve been snookered by the big financial firms, which are padding and over-inflating long-term planning projections because they hope to earn fees managing the vast sums of money we’ve all stashed away in our mattresses.
Maybe they’re right, but it doesn’t really matter in the long run, because if they’re wrong, it’s not they who will suffer. It’s me. Or my daughter. Or my husband. Or my mother.
Nope. I’m not buying this.
From where I sit, there simply isn’t a big enough net for tomorrow. If it turns out that I need less because lightning didn’t strike, great! Because no matter how much I put away, I very much doubt I’ll be taking it with me.