Can you afford to retire?

I read an article today from the Center for Retirement Research and it was another zinger!

Their research showed that "...even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, 43 percent will be at risk of being unable to maintain their standard of living in retirement. Households are more likely to be ‘at risk’ if they are young, have low incomes, or lack pension coverage."

The full article can be read by clicking here and this page includes a link to the full paper in .pdf format.

So can you afford to retire? Almost half of the aging population will not be able afford to stop working. That's a far cry from when my parent's generation worked. Although my father died before he could retire, during his working life he supported a wife, two children, a house, a car or two and yearly vacations. All on his sole salary....

These days, middle class families need two or more incomes just to try and stay even with the bills - leaving no income to save. Americans savings rate for 2006 was NEGATIVE 1% - so we not only spent all the money we earned, we used credit and savings to pay the bills that salaries did not cover. This was our worst savings rate since the Great Depression. And do you know what is was then? It was a negative 1.5 %. And this spending is not for extravagant life styles - it's just trying to pay the normal bills that we get...

It's why I seriously suggest that all employed persons [or those who are already retired] have their own home based business. Not only do you get tax savings, you can earn what is called residual income and hopefully get into a situation where you can earn more than you spend and start saving.....so you retire when you want, how you want and not be dependent on social security or the disappearing and/or declining company pensions.

And, who knows, it may even provide the satisfaction you may not have gotten when you worked for others.