Finances often don’t pop up around family reunions but, as a financial advisor, I often take notice when someone offers their opinions on savings. Everyone has retirement savings. Everyone is contributing regularly to a retirement account. At least, that’s what I chose to believe.

I was wrong.

In fact, the median retirement savings for those 5-10 years away from retirement is just $17,000. Many assume social security will provide for them in their golden years, but they are doomed to reality when they decide to retire. In most cases, social security cannot substitute a person’s entire cost of living, or even a large portion of it. Additionally, for those retiring soon, social security will be an option, but those who are young and just entering the workforce may face an uncertain future. Social security, as we know it, may not exist and therefore we shouldn’t depend on it to play a significant role in our retirement income.

Where retirees get it wrong

For those who are considered high net worth, the belief is you’re heading toward a well-funded retirement, but the truth is most people don’t realize how much they spend or what their lifestyle will cost and, therefore, don’t plan for retirement accordingly.  It’s important to figure out retirement goals and ensure your portfolio and strategy remain on-track. Investment strategies will need correcting as the markets and opportunities change.

If you’re saving more than the average investor then you’re simply better off than they are. It doesn’t mean you’re going to retire comfortably. While statistics are nice comparisons and may make someone feel good about their finances, retirement isn’t a competitive race, it’s an individual goal.

Many individuals plan to retire at a certain age; however retirement really shouldn’t be about age at all. While you may plan to retire at 65, you should instead plan to retire when you achieve the dollar amount and investment strategy that will provide you with the wealth needed to make it through retirement. While no one knows when their time is up, the current life expectancy in the United States is 78. Therefore, if you plan to retire at 65, you should, at a minimum, plan for 13 years of retirement. During those years, it’s uncertain how much social security will increase and what unintended consequences you may encounter. Oftentimes, retirees end up spending more during retirement than they did while working; more free time allows for more spending while healthcare costs can be astronomical.

There is no specific amount you need to save, as retirement varies person-to-person, but the general rule is that if you want to maintain your current lifestyle, you should have 80 percent of your salary available per year in retirement.

However, if you retire at 65 and live to 85, what does that mean for savings? And what if you retire at 65 and live to 95?

What to do if it’s too late

There is no specific route one can take if they need to build their retirement savings and they’re nearing the time they wish to stop working. Simple strategies include paying down debts as much as possible, putting away more money and cutting spending.

All retirement is different and those who lack the means may need to reenter the workforce, at least part-time. In fact, making part-time employment part of your retirement strategy allows more time to accumulate savings, or at least prevent it from dwindling faster.

People are not aware how massive a problem the retirement crisis is. And people don’t seem to care. The government is taking steps to making retirement savings through work easier, but that only works if people take advantage of the 401k opportunities available to them.

Planning for retirement should be a lifelong process for all adults. The younger you start saving, the easier it is as money compounds over time when invested the right way. Wary Millennials may shy away from the stock market as the Great Recession still looms in their conscious, however, if you kept investing over the years then you would have made money.

Social security should not be your only means of retirement income and it’s never too late to start saving. However, the older you are, the more disciplined you will have to be to ensure you can achieve your retirement goals.

The worse thing is to find you’re ready to retire, and you financially cannot.

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PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. This commentary is a matter of opinion and is for informational purposes only. It is not intended as investment advice and does not address or account for individual investor circumstances. Investment decisions should always be made based on the client's specific financial needs, goals and objectives, time horizon and risk tolerance. The statements contained herein are based solely upon the opinions of Telemus Capital, LLC. All opinions and views constitute our judgments as of the date of writing and are subject to change at any time without notice. Information was obtained from third party sources, which we believe to be reliable, but not guaranteed.

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