The Herald Bulletin

August 17, 2013

'Big Joe' Clark: Retirement savings strategy should be deliberate, realistic

By Joe Clark
For The Herald Bulletin

— Let’s cut right to the chase –- odds are you’re probably doing it wrong when it comes to saving.

A study by the Employee Benefit Research Institute in 2012 showed that 60 percent of workers over age 54 have saved less than $100,000 for retirement, excluding home equity and defined benefit plans. Even more shocking: Those between 35 and 44 have not even picked up a calculator when thinking about saving for their life after work.

We also see the other side: individuals so committed to saving for an undefined future that they aren’t enjoying life.

As in all things, there must be a happy medium. The happiest families and most financially secure families we work with all started with a process of saving a certain percentage along the way, managing debt accordingly and enjoying the remainder of their income.

It can be difficult to save when a specific goal is not set. Imagine if a race at the Olympics were set up but the runners weren’t told how far they would be running. How could they prepare themselves or set their pace without knowing whether they were going to run 100 yards or 12 miles?

It’s tough for many consumers to sock away a set amount of money from each paycheck or each month when there isn’t a set goal in mind. I would make the argument that a proper approach to setting goals is just as important as the plan for how one will save.

If you want to retire in 15 years with some large lump sum of money, how do you motivate yourself to get there? How do you know that large sum is correct?

The idea that there is some grand number for you to walk the streets carrying isn’t realistic. If you were to ask a 22-year-old what retirement is like, you’ll probably get an answer that includes “living on the beach” and “traveling the world.” Ask someone who actually is retired, and the answer will sound a little more focused and specific.

Saying you want to retire at XYZ age is not a goal. Take it a step further, why do you want to retire at that age? Is it because you hope to move closer to your kids? So you’re still physically able to travel more? Because you want to start a flower shop or partner with a friend in a new endeavor?

These considerations don’t need to be age-related. So many of the families I work with are terrified to spend the money they have worked so hard to earn. They didn’t set specific goals, so they are nervous to begin enjoying their life after work. They saved for saving’s sake, not their own. Money is a tool to be used, not a mechanism guaranteeing control of our future.

Joseph “Big Joe” Clark, whose column is published Sundays, is a certified financial planner. He can be reached at or 640-1524.