Many people who are in their early 50’s might have been unable or even unwillingly to save for their retirement. Now they are wondering if they are too old to save for retirement.
Liz Weston from MSN Money addressed this very issue in this article.
Dear Liz: I’m 52 years old and have been through divorces that left me broke. I have no retirement and live on a low salary. How or what can I do for a retirement at this point in life?
Answer: You may have seen some chirrupy magazine headline insisting, “It’s never too late to save for retirement!” Except that’s a lie. The longer you put off saving, the harder it is to catch up. At some point, it becomes all but impossible to avoid a steep drop in your standard of living when you quit work.
You’re close to that point. Someone who has nothing saved by age 55 would have to put aside 43% of her pay to maintain her standard of living in retirement, assuming she retires at 65 and Social Security and pensions kick in 25% of her income. That’s according to a T. Rowe Price analysis.
Roger Ibbotson, founder of market tracker Ibbotson Associates, came to a similar conclusion, which is that people who start saving for retirement after age 35 have an increasingly hard time putting aside enough to avoid what’s known as a cliff retirement (meaning your lifestyle falls off a cliff).
To finish reading the article you can click on the word article above the quote.
