Barrington’s Blog » 2009 » February: "How many years can you expect to live off of your savings when you reach retirement age? About 10 years is the average, not including social security. America’s personal savings rate is a negative 0.5 percent. Therefore, many of us are not saving what we should be saving in order to retire comfortably when we decide to retire.
So why are we told to save? The dollar is depreciating rapidly considering that currently the government is spending and borrowing massive amounts of money in the form of bailouts to the banks, Troubled Asset Relief Programs (TARP), and other methods in order to jump start the economy. Some elderly people who are between 50 - 60 years old have lost massive amounts of money in their pension fund, 401k, and stocks they’ve invested in….therefore they must continue working past their retirement age of 65 in order to recoup some of those losses so they can eventually retire when the market and economy bounces back.
How do we avoid this? Why risk building just a nest egg that will be severely taxed when you decide to use it for your retirement? The answer is to build your cash flow while at the same time saving a nest egg - if you focus on building a cash flow first, then you’ll be able to always have a nest egg.
What do I mean? Well most poor and middle class people try to reach retirement by using their own money - this is totally wrong. However, since most Americans don’t know about money - due to the lack of financial education in our schools - we sometimes make bad and uneducated choices. To be financially responsible we must invest our money into dividend paying stocks, REITs, Rental properties, and owning a few businesses wouldn’t hurt either."