Roger Nusbaum submits: "I have not saved enough."

I think this needs to be the mind set when thinking about retirement savings. This probably applies more to folks that are still in the accumulation phase, but maybe not.

The motivation for this post was an article in Barron's that, while not providing anything new, was thought provoking. It included ideas about working longer, living longer, potential threats to social security solvency, and the extent to which boomers are or are not good savers.

The idea of working longer in your first career or some post-retirement career is something that I believe in wholeheartedly. But one reader left a comment on this point a while back noting that sometimes circumstances may make that impossible. Planning to do some work is a good idea, but a financial plan that hinders on it could be asking for trouble.

I tend not to believe that social security will be there as we now know it. There is data to support both sides of this point, but I just don't have faith in it. According to a calculator on Yahoo my wife and I will receive about $3000 per month in today's dollars. Isn't the annual cap about $15000 (for self employed people)? So I'm paying-in $15,000 and I'm getting $36,000? The kicker for inflation makes the estimate in future dollars more like $70,000. Hasn't the ratio of workers to retirees been shrinking for a while with more, ahem, shrinkage, still to come?

I will say that the $3000, if it actually happens, would cover about 90% of every nickel we spent last year, literally every nickel which includes a down payment on a Tundra. I can stop saving now and just party. In all seriousness we live an incredibly modest (cheap?) lifestyle motivated by my parents financial miseries.

Saving too much is not going to be a problem, if you should be so lucky. The "I have not saved enough" mindset will serve me well. You may or may not buy into this, but the numbers of people that have saved enough, relative to their age, is woefully low. My wife's friend who is about 50 said she only has $4000. There is some stat floating out there about most people having less than $50,000 saved.

There is probably some sort of sport analogy about playing with at least some desperation. This can apply to saving habits too. If you focus on investing such that you have found a site like mine to read, you are probably less likely to be so far behind the game as my wife's friend.

Part of financial planning has to be laying out a worst-case scenario, which for me means not working (even though I plan to work), no social security (I don't plan on it anyway), below-average stock market growth and above-average inflation.

If you undo some of the assumptions embedded in your financial plan, where does that leave you? You can go to any online calculator, plug in 5% investment returns and 5% inflation (or any other set of numbers) to get an idea.

I am not a planner of any sort. Portfolio management is not financial planning. A post from me on this topic will not solve anything, but might ask one or two constructive questions. My wife and I are admittedly peculiarly conservative in these matters for reasons touched on above, and so we are not a benchmark for anyone.

We all have gaps and quirks (no one is immune) that potentially get in the way of the desired outcome. These need to be addressed and mitigated to give a better chance for success.

Lastly, thanks for all the great comments in the last few days. It is tough to reply to all of them but I am thankful for them.

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