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Subject:  Are Americans saving too much for retirement? Date:  2/17/2007  10:28 PM
Author:  SirTas Number:  2236 of 116888

This article claims that recent research suggests that the answer to the question is yes.

Some excerpts:

Conventional wisdom suggests that people are woefully unprepared for retirement. Study after study portrays most Americans as the proverbial grasshoppers, playing the fiddle with their finances while a minority of conscientious ants store up supplies for their golden years.

In 2004, for example, the Center for Retirement Studies at Boston College estimated that 43 percent of working households were in danger of having too little income to fund their retirement, even after tapping home equity.

Now a group of economists is offering a wildly contrarian view: People may be saving too much for their retirement. A few go so far as to suggest that the financial services industry is deliberately encouraging over-saving because it profits from managing such assets.

Consider a recent study conducted by Paul Smith and Lucy McNair of the Federal Reserve Board, and David Love, an economist at Williams College. They found that 88 percent of all households with breadwinners over age 51 had accumulated sufficient resources to finance adequate consumption in retirement.

After reading the whole article (and checking out the links to the research) I concluded that what the researchers consider adequate saving is not really adequate.

In the very same article, they also claim that "one third of retired workers depend on Social Security for 90 percent or more of their income." In my case, DW and I will receive about 30k in Social Security. This does not seem "adequate" to me.


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