Sound Money Management with Chuck Johnson – Going Broke in Retirement

It might surprise you to learn that studies have shown that more Americans fear running out of money in retirement than fear death! Yet, that possibility is more likely than you may realize.

According to the Employee Benefit Research Institute, an estimated 40.6% of Americans will suffer a retirement shortfall, running out of money before they run out of life. Even taking into account Social Security benefits, the projected retirement deficit for households headed by someone aged 35 to 64 is $3.83 TRILLION dollars. Clearly we as a society are woefully ill-prepared for a secure retirement.

Interestingly, a different study showed that only 17% of Americans use a Financial Advisor, and over 70% are ‘do it yourself’ investors…. Coincidence? I think not. But I digress.

There are two factors that come into play which are causing this situation:

First, people aren’t saving enough. It is estimated that to maintain a good standard of living into retirement, you should set aside a minimum of 15% of your pay. Many feel this is impossible. There are bills to pay, cars to buy, vacations to take, homes to remodel…. Get the point? Perhaps a review of our spending habits might reveal the possibility for more savings.

Second, many have an unrealistic expectation on how much they will earn on their investments in retirement. Many still believe that old 8% to 10% standard. We haven’t had those averages for 20 years now. Since January of 2000, the markets have averaged less than 5% per year (and you suffered losses of 50% or more TWICE along the way for the privilege of averaging less than 5%!), and a recent analysis performed by four private banks who work with wealthy families came up with an expected return, adjusted for inflation, of just 2.4% per year for stocks over the next twenty years.

The most important thing you can do right now is to make a plan. ‘Hope’ is not a plan. Better to march into the future with your eyes wide open. That way you’ll be better prepared for the inevitable surprises and who knows, sometimes the surprises are good!

If you’d like me to answer any questions on financial planning or investing in general, email me at

Any examples given are hypothetical only and are not intended to reflect the actual performance of any investment.

Chuck Johnson and his wife Beth have lived in the DuBois area most of their lives and have lived at Treasure Lake since 2009. Chuck holds the ChFC and CASL designations from the American College and is the owner and principle advisor of Guardian Planners, working in the financial services industry since 1988.

Charles W. Johnson is a registered with and securities are offered through Kovack Securities, Inc. Member FINRA / SIPC. 6451 N. Federal Hwy., Ste. 1201, Ft. Lauderdale, FL 33308 Tel: (954) 782-4771. Advisory services offered through Kovack Advisors Inc. Guardian Planners is Not Affiliated with Kovack Securities, Inc./Kovack Advisors, Inc.

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