No excuses‼️

I just read another article on how to live frugally in retirement, how to budget every aspect of your retirement life. Is that the desirable goal?

To me forced frugality says you didn’t plan right for retirement. If you enjoy being frugal and tracking every penny you spend, have at it. But if part of your retirement living includes the necessity to relocate to a lower cost state, something is not right.

What’s the right income replacement percentage, 80%, 70%, even 60%? That’s up to you, but whatever it may be it shouldn’t result in living your golden years like tin years. There is no trophy for spending your last twenty-five years trying not to spend money or devoting the first hour of the day entering yesterday’s $5.95 cappuccino on a spreadsheet.

Abandoning frugality doesn’t mean not being prudent with money. It also doesn’t mean living lavishly- although that is subjective. It does mean living in retirement without major forced changes in lifestyle. When I read how some people describe being frugal, it sounds more like miserly to me. I know a woman who has sufficient assets and income, no debt, but forces herself to live on Social Security alone.

For the majority of people there is no excuse to be in the retirement frugal trap. Look at any of numerous studies on saving rates, accumulated retirement savings, net worth consumer debt. For the majority, there is no excuse for the numbers.

The Federal Reserve says the median retirement savings for those age 55-64 is $134,000, Vanguard says $71,168. Those numbers are ridiculous.

If a person saved a fixed $35 per month from age 22 to 64 and earned only 6% a year they would have $79,467.96. Retirees won’t even make frugal living with those numbers. They better start packing for Texas as Brownsville is the least expensive place to live.

For the majority of the population the problem is not income, but spending and lack of financial literacy. Let me at your shopping cart and I will find $35 a month to save. Skip the frozen pizza, a box of Hot Pockets, 12 pack of soda and a 12 pack of beer and you have $35.00 – really, I checked.

The top 10% of Americans hold 93% of all stocks while the bottom 50% hold just 1%. These numbers not only reflect wealth, but financial savvy as well.

“About 58% of households own stocks. Most households own stocks through a retirement account, such as a 401(k), but more Americans in the past few years have invested in individual shares directly. Direct stock ownership increased to 21% of families in 2022 from 15% in 2019” according to the Wall Street Journal 12-18-23.

Stock ownership in a 401k is pretty much by default. Nearly 80% directly avoiding the stock market is lack of knowledge. The wealthy are wealthy mostly for a reason that escapes average Americans – investments.

You can buy large cap index funds with no minimum investment and low fees. Watch that $35 grow over forty years, imagine the affect of increasing your savings as your income grows.

Is there really an excuse for 70-80% of Americans not to be headed for a better retirement?