Preparing for Retirement

TLDR:

Supporting Discussion

Regardless of your current age, all of us are getting older.

At some age many of us want to escape hustle culture and stop the grind of daily work to generate an income -- to retire. For any given individual, retirement may mean something different. For most of us it will be unrecognizable from commercials showing athletic retirees on sailing yachts, at beach mansions, in our newly-restored jazz club, or in our retirement estate for former racing dogs [wealth porn]. In the United States, though, entertaining our retirement ideas will require an income stream. Note 1 It seems prudent to think about your quality of life in retirement...before you retire. Don't do this (or here).

While it may not be central to your quality of life plans, reaching a certain level of financial readiness for retirement will influence that quality of life for most of us. Five key aspects of any retirement plan are [1] when, where and how much we invest/save (which we can influence and can have a material influence on our retirement readiness), [2] future rates of return on retirement assets and their timing (which almost none of us can influence), [3] future wage growth rates (again, beyond our influence at a macro-level, but most of us can influence ours at an individual level), [4] the timing and magnitude of future inflation rates (which almost none of us can influence) and [5] how much we spend (which we can influence and can also have a material influence on our retirement readiness). There is also the issue of life expectancy at age 65 in the United States... As a whole, it appears that at 65 years old men in the U.S. might expect to live another 17 or 18 years, and women slightly over 19 years (also: Note 7) -- but your overall health, where you live, wages while working, race, ethnicity, your skin color, education and more can materially influence those numbers. If you are lucky-enough and wise-enough to hit all the most positive characteristics, you might expect to live in the neighborhood of 30 years after 65 -- which could be a lot of years to fund.

Even if we expected, needed or wanted to continue working for income and roughly 20% of those over 65 do today, many of us will suffer physical and/or cognitive decline in ways that will make doing so impractical.

For reference, in July 2022 Gallup reported that U.S. retirees on average, said that they retired at age 61, four years later than three decades earlier, and Pew Research Center reported that as of the third quarter of 2021, 50.3% of U.S. adults 55 and older, 66.9% of 65- to 74-year-olds, and 86.7% of those 75-year-olds and older said they were out of the labor force due to retirement, according to a Pew analysis of the most recent official labor force data. In 2020-2021 around 4,800 individuals in the U.S. retired every day (one retirement every 18 seconds).

More recently, the 2024 Employee Benefit Research Institute's Retirement Confidence Survey (EBRI RCS) found that "retirees report they retired at a median age of 62." They also wrote that 32% of retirees report that they retired by age 60 and another 38% say they retired between the ages of 60 and 64.

For almost all of us, preparing for retirement is an integral part of our work-life. If you have some employer-sponsored or employer-assisted retirement investing options, use them.
Traditional pension plans -- often called defined contribution plans -- are rare. These plans required employers to assume the investment risks required to pay retiree benefits. In the U.S. employers are no longer willing to take on those risks. Traditional pension plans have been all but replaced by 401(k) plans (and related 40x(x) plans) -- which are often called defined contribution plans. Unlike traditional pensions, these plans will pay you nothing unless you invest in them. Essentially, the current U.S. retirement system is pushing working people to become investors and to assume all the associated risks.

Getting realistic and explicit about financing your retirement is a topic that is easy to neglect. Resist that heedless path. Also resist the force of negativity bias -- the tendency to exaggerate negative information -- and its resulting "behavioral tendency to overweight a narrow range of possible future events in light of incoming information," even when it is misleading or otherwise inaccurate. Some behaviors may be generational - Fidelity reported that 45% of NextGen "don't see a point in saving until things return to normal." Remain aware that there are many biases that can interfere with your retirement planning and supporting financial management behaviors -- see the list at: https://en.wikipedia.org/wiki/List_of_cognitive_biases

If you're thinking about preparing for retirement, assume that you will never have everything lined up or figured out perfectly before you start. Retirement planning guru Wade Pfau has written that "Retirees have one opportunity to build a successful plan." (I am confident Dr. Pfau did not mean this in its most literal reading...) But I think that it is more practical to just start planning and acting on that plan today, than to attempt plan perfection before plan execution. Things change. Constantly. As is true for virtually any activity that requires you to invest over time, a secret to creating lasting momentum is to start now and evolve over time. Let time be your ally.

If you have not already done so, check the Social Security Administration's Retirement Benefits Estimator to get an idea of what your guaranteed income stream may be -- or use their Quick Calculator for an estimate, and the same for a spouse. For most, it will not be enough to meet your wishes and you will need to cobble together additional means of retirement support over the course of your working life.

Health care also needs to be built into your planning. Medicare.gov has a lot of useful resources, including this summary of 2024 Medicare costs/expenses](https://www.medicare.gov/Pubs/pdf/11579-Medicare-Costs.pdf) and a tool to help get started finding Medicare supplemental insurance.

How do you prepare for retirement?

"Money isn’t everything, but it’s something."

Preparing for retirement is not a race to amass huge sums of liquid assets. It is about living your life. But for most of us, it requires an honest reckoning with our income needs and what we might have coming from Social Security. The Social Security Administration provides an easy-to-use tool to estimate your retirement benefits at different ages and dates so that you can understand the scale of that future cash flow. For context, as of Summer 2025, the Social Security Administration reports that the average monthly Social Security retirement check in 2025 is $1,976, that if you retire at age 62 in 2025, your maximum benefit would be $2,831 and that the maximum possible benefit at Full Retirement Age would be $4,018 (or $5,108 if you retire at age 70 in 2025). If you are lucky, there may also be some employment-related retirement payments, but counting on a traditional pension is not an option for most of us. Expect that you will need additional sources of income. Try to define what that means in dollars-per-unit-of-time (for example, some number of dollars per month or per year), and then begin assembling the means to generate that income stream.

When you retire can make a big difference in your monthly Social Security income (2025 amounts):

When How much monthly Calculated annual
Average Soc.Sec. check $1,976 $23,712
Max. @ 62 yr.old $2,831 $33,972
Max. @ Full Retirement Age $4,018 $48,216
Max. @ 70 yr.old $5,108 $61,296

Social Security payments are based on the number of "work units" individuals accumulated throughout their lives and by age at retirement. For most of us, working at a tax-paying job throughout our adult life materially impacts the scale of our Social Security retirement payments.

If you have any type(s) of employer match components of a defined contribution plan use them. If possible, invest enough to get 100% of the employer match. Those matching dollars are a critically important component of your overall employment benefits. It is impossible to exaggerate their importance in your retirement preparations. If you do not have this type of employer benefit, you still need to prepare for the future. If you are still young, 10% is a commonly advised savings goal and 15% is probably more appropriate for many, but the most important consideration is getting into the habit of saving, so if you can't do 10% yet, start with 3% or 5% -- the critical thing is to start. In October 2022 the U.S. Dept. of Commerce Bureau of Economic Analysis reported that U.S. "personal saving as a percentage of disposable personal income was 2.3 percent" -- quite a bit lower than just six or eight months before. It appears that the 2022 level did not stick, and by 2024 and into 2025 personal saving as a percentage of disposable personal income was around 4.5 percent -- still not enough to represent a national population preparing for long, comfortable retirements. Levels that low for the rate of savings increases the likelihood that too many are unlikely to be well prepared for retirement. If you find your savings at these levels or below, invest some time in thinking about how to reconfigure your income, spending and saving in ways that will drive your rate of saving up.

Formal Education Appears to Help

If you have the opportunity -- or if you can create the opportunity -- get a marketable college degree at an accredited non-profit college or university. (Too many for-profit 'institutions of higher education' and 'trade schools' seem to engage in predatory business models. They seem like an unreasonable risk to me.) Mid-2025 research from the New York Federal Reserve supports this recommendation:

"...the gap in employment rates between workers who have completed college and workers who have not is 12 percentage points—which is larger than the employment gaps between workers of different races/ethnicities or between men and women—and is wider than the pre-pandemic gap."

Research by the U.S. Federal Reserve has shown repeatedly that:

"Income also shows a strong positive association with education; in particular, income among families in which the reference person (i.e., head of household) has a college degree tends to be substantially higher than for those with less schooling. Mean income among college-educated families in the 2019 SCF was more than twice that of families in any other education group."

For example, the impacts in real dollars can be seen in the 1st quarter 2025 U.S. Department of Labor "Usual Weekly Earnings Summary of Wage and Salary Workers" reported:

"full-time workers age 25 and over without a high school diploma had median weekly earnings of $743, high school graduates (no college) had earnings of $953, and those holding at least a bachelor's degree had earnings of $1,754. Among college graduates with advanced degrees (master's, professional, and doctoral degrees), the highest earning 10 percent of male workers made $5,079 or more per week, and their female counterparts made $3,528 or more."

Similarly, Auerbach, Kotlikoff and Koehler report in July 2022 that:

studies by Goldin and Katz (2008) and Acemoglu and Autor (2011) show a steady and dramatic 75 percent increase in the college/high school wage premium over the last three decades, with typical college graduate wages now double that of high school graduates.

Research from MDRC reported in April 2023 that graduation from a community college can deliver material economic advantage.

"A new study of CUNY's Accelerated Study in Associate Programs (ASAP) shows it increased the earnings of students who participated in the program by 11 percent." Victoria (Torie) Ludwin, Arnold Ventures

The relatively dramatic differences in income can make a huge difference over the 40 or more years that many of us will work and positively influence one's ability to prepare for retirement. Take a look at the macro view of wealth and educational attainment from the Federal Reserve](https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:0;series:Net%20worth;demographic:education;population:all;units:shares;range:1989.3,2025.1). While these facts about income and educational attainment may not be indicators of causation, educational inequality is real, and your zip code at birth is still a strong indicator of future earnings and asset accumulation. But earning a college degree still has material value for many and can open opportunities that are virtually closed to those without. (Caution: All college degrees do not supply the same likelihood of lifetime financial advantage. Race, gender, and more can influence the nature of any individual's "return on education"). For many, a degree in an esoteric field in the humanities is less likely to support a strong retirement savings plan than would a degree in computer engineering, economics, or chemistry, etc.). Colleges vary along many dimensions, and it is important to manage your college costs and expectations, and to think through your college goals. The U.S. Department of Labor's Bureau of Labor Statistics has some extensive and useful datasets that can help illustrate the differences in income that are measured for a long list of occupations (the differences between the wages paid to Fast Food and Counter Workers or Fast Food Cooks and Registered Nurses, Occupational Therapists or Information Security Analysts is vast -- the BLS says an average of more than $3,000,000 over 40 years). See the Occupational Employment and Wage Statistics (OEWS) Tables home page to begin researching that data.

In their book "Deaths of Despair and the Future of Capitalism" and in subsequent research Anne Case and Angus Deaton argue that there are also a range of non-economic severely negative consequences of acquiring less rather than more formal education:

"Over the last decade, mean income rose in the US while life expectancy fell for three years prior to the arrival of COVID-19, and fell further during the pandemic. The typical household in the US has often done much worse than typical households in other wealthy countries. Those with a college degree are a minority of the US population. Life expectancy for Americans with at least a BA looks like life expectancy for the best performing countries in the world, while the US is the only case where life expectancy is falling for the less-educated group. Within the US, the gap in adult life expectancy between those with and without a BA rose from 2.6 years in 1992 to 6.3 years in 2019, the eve of the pandemic, with a further rise to 8.5 years in 2021. The causes of “deaths of despair” were and are more common among those without a four-year college degree, with mortality differences between the education groups ever increasing."

Their research and analysis about quality-of-life related to educational attainment suggests another reason (far from simple "retirement planning") to keep higher education in focus when thinking about your future.

Building a Plan Helps

The literature seems to suggest that establishing and periodically grooming a plan with the assistance of a formal finanical advisor works best. Also, pick a target age for retirement to use in calculations that will test the viability of that plan over time.
And start as early as you can so that the magic of compounding has enough time to come to your aid -- while remembering that:

Material Downturns Occur Regularly

Below are S&P Bear Markets since 1973 (as a proxy for the entire market):

Description                   Period                       Percent decline Months of decline Months of recovery
1973 Conflict in the Middle East 11 Jan. 1973--17 Jul. 1980 -48% 21 70
1980 Stagflation 28 Nov. 1980--03 Nov. 1982 -27% 20 3
1987 Black Monday 25 Aug. 1987--26 Jul. 1989 -34% 3 20
1990 Gulf War 16 Jul. 1990--13 Feb. 1991 -20% 3 4
2000 Tech Market Madness followed by War-In-Iraq Madness 24 Mar. 2000--30 May 2007 -49% 31 56
2007 Mortgage Madness & Real Estate-Backed Securities Crash 09 Oct. 2007--28 Mar. 2013 -56% 17 49
2018 Fear/Profit taking (almost bear) 20 Sep. 2018--23 Apr. 2019 -19.8% 3 4
2020 COVID-19 Pandemic Shock 19 Feb. 2020--Aug. 2020 -34% 1 5
2022 Pandemic Supply Chain and vendor greed Crisis 3 Jan. 2022--Jun. 2023 -25% 10 8

Investing in stocks and equity index or mutual funds will require you tolerate some volatility. While even the best financial advisor will take reasonable care in developing and making recommendations, investing in securities involves risk, and you may lose money. In extreme cases losses may include your entire investment capital -- but a foundational component of your planning involves building a savings/investment portfolio that resists extreme loss. At any given point in time, historical patterns are not always useful as illustrations of future trends. This issue is especially true for shorter timelines. Approach risk-taking seriously.

Remain Sufficiently Informed

Challenges Are Real -- Get Started Anyway

I understand that not everyone on this journey starts in equal circumstances. The Social Security Administration (SSA) put the average U.S. annual net wage in 2020 at $53,383, and the median net wage at $34,612. That compares with the Labor Department's Bureau of Labor Statistics (BLS) release in May 2020 saying that median annual gross wage earnings across all occupations was $56,310. See the table below for updates since 2020. That suggests that many are not earning enough to make saving easy.

Reporter Average Annual Median Annual
2025 SSA Not Avail. Not Avail.
2025 BLS Not Avail. Not Avail.
2024 SSA Not Avail. Not Avail.
2024 BLS $67,920 $49,500
2023 SSA $63,932 $43,222
2023 BLS $65,470 $48,068
2022 SSA $61,220 $40,847
2022 BLS $61,900 $46,300
2021 SSA $58,129 $37,586
2021 BLS $58,260 $45,760

Sources: Average and Median Amounts of Net Compensation and Occupational Employment and Wage Statistics (OEWS) Tables sanity checked against U.S. Census data: Income in the United States: 2023 and Wealth of Households: 2022

Assembling a diverse portfolio requires resources.

Gender plays a material role in earnings in the U.S. In late 2021 U.S. Department of Labor outlined gender impacts in detail. They summarized that data with: "Men's and women's earnings were closer among younger workers than older workers; for example, women ages 16 to 24 earned 94.1 percent as much as men in the same age group, while the women's-to-men's earnings ratio was 76.9 percent for those age 55 and over."

In addition, non-whites in the U.S. face systemic economic pressures that are material to any discussion about retirement planning. 4th quarter 2021 U.S. Department of Labor reported that "median weekly earnings of Blacks ($805) and Hispanics ($799) working full-time jobs were lower than those of Whites ($1,030) and Asians ($1,384)." Those differences impact wealth accumulation. The Federal Reserve maintains a macro view of wealth distribution by race over time. In 2019 The Federal Reserve published a paper outlining disparities in wealth by race and ethnicity -- showing that there are sizeable differences in wealth by race and ethnicity, most starkly between young Black and young White families:

The median young Black family has almost no wealth ($600).  
In contrast, the median young White family has a wealth of $25,400.  
Young Hispanic and other families fall in between, 
with $11,200 and $13,500 in median wealth, respectively.

Julie Zauzmer Weil added some context (in the Washington Post) about how slavery and slave owning in the United States played a foundational role in how "African Americans to this day lack the intergenerational wealth of White Americans. The typical Black household’s wealth is less than a tenth that of the typical White household."

There are other systemic, race-relevant wealth-accumulation issues as well. Research from the St. Louis Fed. documented that many single mothers have very low levels of financial reserves. "Among singles (i.e., those who have never married, are divorced, widowed or separated) in 2019, mothers of minor children had the lowest levels of median wealth by far, with only about $7,000 in family wealth."

Wealth is important for housing and food security, and financial well-being more generally, though it varies considerably by race and ethnicity. Single white mothers had $46,000 in median wealth in 2019, whereas single Black and Hispanic/Latina mothers had about $4,000. Single white mothers thus had about 11 times more median wealth, affording them a more comfortable cushion when dealing with unanticipated events like the pandemic. In 2020, Black and Hispanic/Latina women (ages 25-54) were more likely to be single mothers of children ages 0-17 than were white women; the likelihood of being such a mother was 26%, 19% and 11%, respectively.
https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions

Changing that racial disparity, which is real and is a slice of broader long-running racism, is critically important, but is beyond the scope of this argument. If you are interested in more material on this topic, it might be useful to start at Wikipedia's "Racism against African Americans" page, or more generally at their "Racism in the United States" page.

A recent Federal Reserve paper documented that a very different constellation of circumstances is associated with "millennials own(ing) fewer assets than members of earlier generations" when they were young, with lower earnings, fewer assets, and less wealth.

The most recent Federal Reserve data says that only 54.5 percent of Americans ages 55 to 64 have retirement accounts.

If you find yourself a decade or more behind your peers -- or if you just fear it -- the foundational rule is to get started on a path to some type, some level of retirement readiness.

At times throughout my adult life I have listened to peers romanticizing the lives of the poor, sometimes in the context of describing their expectations in old age. If you ever find yourself doing the same, stop. Living in the United States of America without having enough money is hard! Our systems are built around -- among other critical dimensions -- social and economic thresholds that introduce additional tasks (work) and expenses ("taxes" by other names) for the survival of those considered "poor." Being poor in the U.S. is exhausting, punishing, and demoralizing -- and "just being poor" is an unsuitable retirement goal for anyone who has the potential current means to do otherwise.

Regardless of the scale of your available resources, the most important short term priority is to start building wealth. How much wealth? That will vary, but for a few decades a commonly-repeated target was "you need 25-times your pre-tax income portfolio goal when you retire" (here quoted from David M. Blanchett, Ph.D., CFA, CFP®, and more), which I believe for most can safely be simplified to "your retirement investment portfolio should be 25 times the size of your annual income at retirement." For most of us that can seem like a challenge, but try to remain engaged in your efforts to prepare for your retirement -- don't freeze up. Research your options -- there are lots of on-line resources. A very quick, crude, retirement savings calculator is available at: https://www.cnn.com/business/calculators/retirement-calculator. Make decision after decision. Take the next step, and the next. Here is an example of what 20 and 25-times some sample annual incomes looks like:

Annual Income Times 20 Times 25
$20,000 $400,000 $500,000
$30,000 $600,000 $750,000
$40,000 $800,000 $1,000,000
$50,000 $1,000,000 $1,250,000
$60,000 $1,200,000 $1,500,000
$70,000 $1,400,000 $1,750,000
$80,000 $1,600,000 $2,000,000
$90,000 $1,800,000 $2,250,000
$100,000 $2,000,000 $2,500,000
$110,000 $2,200,000 $2,750,000
$120,000 $2,400,000 $3,000,000
$130,000 $2,600,000 $3,250,000
$140,000 $2,800,000 $3,500,000
$150,000 $3,000,000 $3,750,000

[I have seen opinion pieces and research papers that replace the "Annual Income" I used above, with "Annual Spending." There may be material distance between these two values. "Annual Spending" may be a more appropriate value for some. Use which ever seems most appropriate for your situation.]

[For context: according to the Schwab Modern Wealth Survey June 2023, the average American says being rich means having a net worth of $2.2 million -- the same number as in their 2022 research]. ...read on
The Schwab 2024 and 2025 Surveys found that it took $2.5M and $2.4M "to be considered wealthy."(To be fair, Schwab broke down that feeling of "wealthy" into a range of components: Happiness, Amount of money I have, Physical health, Mental health, Quality of my relationships, Life experiences, Accomplishments, Amount of free time and Material possessions. Which seems like a healthier way to look at wealth than simply "money." But this is a discussion about generating income during retirement -- which for most of us means "money" or another income-generating asset in one form or another.

The 2024 Planning & Progress Study, an annual research study from Northwestern Mutual (a company that sells retirement-related services and investments) reported that:

Americans’ “magic number” for retirement is surging to an all-time high – rising much faster than the rate of inflation while swelling more than 50% since the onset of the pandemic. U.S. adults believe they will need $1.46 million to retire comfortably, a 15% increase over the $1.27 million reported last year, far outpacing today’s inflation rate which currently hovers between 2% and 3%. Over a five-year span, people’s ‘magic number’ has jumped a whopping 53% from the $951,000 target Americans reported in 2020.
By generation, both Gen Z and Millennials expect to need more than $1.6 million to retire comfortably. High-net-worth individuals – people with more than $1 million in investable assets – say they’ll need nearly $4 million.
Meanwhile, the average amount that U.S. adults have saved for retirement dropped modestly from $89,300 in 2023 to $88,400 today, but is more than $10,000 off its five-year peak of $98,800 in 2021.

Again, these numbers can seem like a challenge in isolation. But for many who reach them, they are the result of regular saving and investing for retirement and full participation in employer plans over many years. One of the keys is to start and stick with a plan.
There is some material disagreement about this 20x to 25x target -- the approach outlined above may not be right for everyone. See the "Are You Saving Enough For Retirement? At this household income:" table in this article by Paul Katzeff for an alternative idea -- one that I believe materially increases one's longevity, uncertain (medical or other) material expenses in old age, and market timing risks. Fidelity mirrors some of Mr. Katzeff's ideas when they argue for a goal of "saving 10x (times) your preretirement income by age 67." Fidelity argues that it is helpful to target "age-based milestones." "Aim to save at least 1x your salary by 30, 3x by 40, 6x by 50, 8x by 60, and 10x by 67". Roger Young, CFP, Thought Leadership Director, T. Rowe Price, recently wrote that "we recommend that most people consider a target between seven and 13½ times their ending salary," depending "on your income and marital status." As a result, I've added another table below that includes examples of what 10 and 15-times some sample annual incomes look like (understanding that less retirement savings means, for most, increased risks):

Annual Income Times 10 Times 15 Times 20 Times 25
$20,000 $200,000 $300,000 $400,000 $500,000
$30,000 $300,000 $450,000 $600,000 $750,000
$40,000 $400,000 $600,000 $800,000 $1,000,000
$50,000 $500,000 $750,000 $1,000,000 $1,250,000
$60,000 $600,000 $900,000 $1,200,000 $1,500,000
$70,000 $700,000 $1,050,000 $1,400,000 $1,750,000
$80,000 $800,000 $1,200,000 $1,600,000 $2,000,000
$90,000 $900,000 $1,350,000 $1,800,000 $2,250,000
$100,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000
$110,000 $1,100,000 $1,650,000 $2,200,000 $2,750,000
$120,000 $1,200,000 $1,800,000 $2,400,000 $3,000,000
$130,000 $1,300,000 $1,950,000 $2,600,000 $3,250,000
$140,000 $1,400,000 $2,100,000 $2,800,000 $3,500,000
$150,000 $1,500,000 $2,250,000 $3,000,000 $3,750,000

For many, a material component of your retirement readiness equation is your spending behaviors. As of Q2 2025 America's household debt is around a staggering $18.39 trillion. In October 2023, Cora Lewis (Associated Press) reported that "about 2 in 3 Americans say their household expenses have risen over the last year, but only about 1 in 4 say their income has increased in the same period, according to a new poll from The Associated Press-NORC Center for Public Affairs Research." She added that "About 8 in 10 Americans say their overall household debt is higher or about the same as it was a year ago. About half say they currently have credit card debt, 4 in 10 are dealing with auto loans, and about 1 in 4 have medical debt. Just 15% say their household savings have increased over the last year." Inflation, debt and savings are key facets of individual and family money management.

Some are unable to get started on that savings journey. A 2024 AARP survey found that "20% of adults ages 50+ have no retirement savings, and more than half (61%) are worried they will not have enough money to support them in retirement."

The "data" on retirement savings varies materially. In May 2024 Deposit Accounts said that "The average retirement account savings for those ages 65 to 74 is $609,230."

After analyzing data from 4,588 online interviews, researchers published in the 2024 Planning & Progress Study that they found "there are large gaps between what people think they’ll need to retire and what they’ve saved to date:"

Research Finding All Gen Z Millennials Gen X Boomers+ HNW ($1M+)
Amount saved for retirement currently $88,400 $22,800 $62,600 $108,600 $120,300 $172,100
Gap between retirement goal and current savings $1.37M $1.61M $1.59M $1.45M $870K $3.76M

Source: "2024 Planning & Progress Study – Work, Retirement & Taxes" page 5, downloaded 2024-04-03.

Based on survey results like that above and excellent overviews of the topic like "5 Money Mistakes That Can Make the Road to Retirement Even Longer" by Lisa Rabasca Roepe, it is clear that there are widespread circumstances that make saving and investing a material challenge. But some circumstances are of our own making -- which we can influence. There is no magic "fix" and be wary of anyone offering/selling one. For those who find themselves in the most economically constrained circumstances, income and spending are the primary levers available for generating future retirement funding.

There are many external forces (for some these include material systemic forces) that may inhibit your ability to increase your income. While reducing the negative impacts of those external forces and tamping down race/gender/identity descrimination are important missions, they do not replace the need to deal with the everyday individual and family financial preparations for retirement and/or "old age" -- which remain foundational for most of us.

On the spending side of this equation, the conventional advice is to be mindful, self-aware and alert. When building a budget or in the act of spending, ask yourself, "Am I doing the right thing?" This is especially true for your non-essential 'consumer' behaviors, or where for any given expense there are a range of options, of varying costs. For a lot of us, asset accumulation also meant deciding how not to spend our money (or at least initially, how to manage impulse spending). This does not have to involve negative self-denial. Some argue that voluntary simplicity is the most approprate approach to generating investable assets, but there is not general agreement about its practicality for most.

If you can look at your own actions from the perspective of a third party who cares about meeting your retirement goals, you may be able to make consumption choices better aligned with your retirement asset accumulation goals.

Also, a number of wise peers have counseled me to remember that it's never too late to learn, and asking a question is often more important than knowing the answer. Thank you Pranav Doctor.

There will be some uncertainty. It is not unusual to find your inner voice asking: "How did I end up here?" or "What am I doing with my investments?" or even "Why did I ever agree to this?" There is no magic for dealing with these issues. Talk with people you trust. Listen. Read. Take a class. Learn about your options for managing your money, saving and investing. And, as needed, adapt.

There are some useful tools and information at: SEC Investor.gov Publications and Research (includes financial tools and calculators) https://www.investor.gov/introduction-investing/general-resources/publications-and-research.

How do you know your plan is working? Identify and then start documenting some dimensions of that plan. Tracking Savings habits, credit card (or other high-interest) debt, auto debt, emergency savings [Note 4], and asset portfolio size-and-risk might be useful measures for determining the succcess of your plan. Bankrate offers a useful "3 tips on building your emergency fund amid a turbulent economy" to help anyone get started on their journey to building an emergency savings pool that fits their needs:

  1. Figure out how much you need in emergency savings
  2. Open a savings account just for emergencies
  3. Make [and use]a budget around savings

Think about and plan for how you will react to any changes in household income -- the New York Federal Reserve has publishes research results about how Americans expect to allocate an increase or decrease in household income (numbers below are for Apr 2025):

Your financial planner will take your information, run a set of Monte-Carlo (or other) simulations, and report on the probability of your plan and your behaviors against that plan, meeting goal(s) that define your successful financial outcome(s) at given ages in the future. Carefully review the assumptions that your financial planner used to build your reports! Ensure that you understand each and that you agree with those values -- change any to fit your assumptions and needs.

There are many correct answers to questions about that targeted 'age at retirement,' beyond just achieving some financial goals. Dana G. Smith outlines a number of issues to consider on this topic in "What Is the Ideal Retirement Age for Your Health?." These include, but are not limited to, maintaining your cognitive health (continued working may help some), the nature of your worklife occupation (some occupations can wear your body out earlier than others), your life expectancy (which incorporates your individual and family health history, race, gender and more). Entering retirement 'too early' can increase the probability of negative health outcomes. That said, it can also have the reverse -- Dr. Lisa Renzi-Hammond, director of the Institute of Gerontology at the University of Georgia said:

"If you’re leaving a job that is physically bad for you, where you are getting terrible sleep and you’re constantly stressed out, then retirement is great for your health."
The materially shorter "health span" and life expectancy for Black men, for example, may result in less accumulation of retirement assets as well as recieving less retirement-associated income. Also, the "toll chronic stress from discrimination takes on the body" is known to materially reduce working-life expectancy. Both these issues are relevant to the ongoing wealth gap between Blacks, Native Peoples and Whites in United States.

When you approach or enter retirement, your willingness to assume risks in equity, commodity, or other markets may evaporate [this might be changing]. It is a challenge, though, to generate an adequate income stream using only the safest of financial instruments (cash, or near-cash equivalents). ...And bond funds don't deliver the level of predictability in their returns (that some are used to). Safety does not seem to pay today [Note 5] -- you may receive less than one half of one percent interest in your local bank, especially if you use one of the five biggest U.S. banks. As a reality check, you can easily review how much annual income a given pile of financial assets can reliably generate in a range of rates of return (including extremely low interest rates that some approaches still offer). Storing your money in cash or equivalents will generally deliver stability, but with a relatively low (some might say 'microscopic') return (...although it is possible in early 2025 to get more than 3.0% interest on savings accounts at some online banks for your liquid-cash-on-hand needs). See the table below:

Assets 1.0% 1.25% 1.5% 1.75% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% Assets
$50,000 $500 $625 $750 $875 $1,000 $1,250 $1,500 $1,750 $2,000 $2,250 $2,500 $2,750 $3,000 $50,000
$100,000 $1,000 $1,250 $1,500 $1,750 $2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000 $100,000
$250,000 $2,500 $3,125 $3,750 $4,375 $5,000 $6,250 $7,500 $8,750 $10,000 $11,250 $12,500 $13,750 $15,000 $250,000
$500,000 $5,000 $6,250 $7,500 $8,750 $10,000 $12,500 $15,000 $17,500 $20,000 $22,500 $25,000 $27,500 $30,000 $500,000
$750,000 $7,500 $9,375 $11,250 $13,125 $15,000 $18,750 $22,500 $26,250 $30,000 $33,750 $37,500 $41,250 $45,000 $750,000
$1,000,000 $10,000 $12,500 $15,000 $17,500 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000 $1,000,000
$1,250,000 $12,500 $15,625 $18,750 $21,875 $25,000 $31,250 $37,500 $43,750 $50,000 $56,250 $62,500 $68,750 $75,000 $1,250,000
$1,500,000 $15,000 $18,750 $22,500 $26,250 $30,000 $37,500 $45,000 $52,500 $60,000 $67,500 $75,000 $82,500 $90,000 $1,500,000
$1,750,000 $17,500 $21,875 $26,250 $30,625 $35,000 $43,750 $52,500 $61,250 $70,000 $78,750 $87,500 $96,250 $105,000 $1,750,000
$2,000,000 $20,000 $25,000 $30,000 $35,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 $110,000 $120,000 $2,000,000
$2,250,000 $22,500 $28,125 $33,750 $39,375 $45,000 $56,250 $67,500 $78,750 $90,000 $101,250 $112,500 $123,750 $135,000 $2,250,000
$2,500,000 $25,000 $31,250 $37,500 $43,750 $50,000 $62,500 $75,000 $87,500 $100,000 $112,500 $125,000 $137,500 $150,000 $2,500,000
$2,750,000 $27,500 $34,375 $41,250 $48,125 $55,000 $68,750 $82,500 $96,250 $110,000 $123,750 $137,500 $151,250 $165,000 $2,750,000
$3,000,000 $30,000 $37,500 $45,000 $52,500 $60,000 $75,000 $90,000 $105,000 $120,000 $135,000 $150,000 $165,000 $180,000 $3,000,000
$3,250,000 $32,500 $40,625 $48,750 $56,875 $65,000 $81,250 $97,500 $113,750 $130,000 $146,250 $162,500 $178,750 $195,000 $3,250,000
$3,500,000 $35,000 $43,750 $52,500 $61,250 $70,000 $87,500 $105,000 $122,500 $140,000 $157,500 $175,000 $192,500 $210,000 $3,500,000
$3,750,000 $37,500 $46,875 $56,250 $65,625 $75,000 $93,750 $112,500 $131,250 $150,000 $168,750 $187,500 $206,250 $225,000 $3,750,000
$4,000,000 $40,000 $50,000 $60,000 $70,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 $220,000 $240,000 $4,000,000
$4,250,000 $42,500 $53,125 $63,750 $74,375 $85,000 $106,250 $127,500 $148,750 $170,000 $191,250 $212,500 $233,750 $255,000 $4,250,000
$4,500,000 $45,000 $56,250 $67,500 $78,750 $90,000 $112,500 $135,000 $157,500 $180,000 $202,500 $225,000 $247,500 $270,000 $4,500,000
$4,750,000 $47,500 $59,375 $71,250 $83,125 $95,000 $118,750 $142,500 $166,250 $190,000 $213,750 $237,500 $261,250 $285,000 $4,750,000
$5,000,000 $50,000 $62,500 $75,000 $87,500 $100,000 $125,000 $150,000 $175,000 $200,000 $225,000 $250,000 $275,000 $300,000 $5,000,000
$5,250,000 $52,500 $65,625 $78,750 $91,875 $105,000 $131,250 $157,500 $183,750 $210,000 $236,250 $262,500 $288,750 $315,000 $5,250,000
$5,500,000 $55,000 $68,750 $82,500 $96,250 $110,000 $137,500 $165,000 $192,500 $220,000 $247,500 $275,000 $302,500 $330,000 $5,500,000
$5,750,000 $57,500 $71,875 $86,250 $100,625 $115,000 $143,750 $172,500 $201,250 $230,000 $258,750 $287,500 $316,250 $345,000 $5,750,000
Assets 1.0% 1.25% 1.5% 1.75% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% Assets

Some individuals and families have retirement cash flow expectations of $150,000/yr, $200,000/yr, $300,000/yr, and some even more. I included some big numbers in the Assets column above to help demonstrate the scale of preparation required to support income streams like that. I read that too often, individuals spending at these levels in retirement have not constructed the required financial foundation, and burn through material portions of their retirement funds before aknowledging that situation -- leaving them seriously financially challenged for the duration of their life. My working assumption is that is not where any of us want to land.

Those upper rows refer to material wealth. Who has that kind of money?[Note 6] Most don't. While there have been recent wage increases, over the past 40 years wages have stagnated against the cost of living for most Americans. And the proportion of the U.S. population who have accumulated $1.2 million or more has shrunk and the distance between the median wealth and entry into the top 9.9% has more than doubled in the last 6 decades.
In "The 9.9 Percent," Matthew Stewart noted that in 1963, the median household would have needed 10 times as much wealth to reach the middle of the (top) 9.9 percent. Today (2020 or 2021), it would need 24 times as much wealth.
He also reported that it took $2.4 million in assets to reach the the 9.9 percent group's median... (Quoted from a review by Eyal Press) The U.S. Federal Reserve reported that the top 1% of of Americans by accumulated wealth own over a third of all wealth in the country (roughly the same amount as the bottom 90%), while the bottom 50% own about 2.3% of all wealth. Those are just (point-in-time) facts but wealth was still Similarly distributed in Q1 2025. They document the distribution of wealth in the U.S. -- that by almost any measure seems unfair. They do not, though, alter the ruthless impacts of time and aging that require planning for old age and whatever will be your retirement.

Not All Asset Types Represent Equal Value in Retirement

Once you retire and begin drawing from your accumulated assets, it is also important to consider the impacts of taxes on your various options. Money in plain old-fashion bank savings accounts don't generate a taxable event when you make withdrawls. Withdrawals from an Roth IRA are not taxable if you are at least 59 1/2 (which can be a material advantage), as long as you have kept the money in the Roth IRA account for at least five years. As a result, those options are -- dollar for dollar -- worth more than traditional IRAs and 401(k)s. Withdrawals from defined-contribution plans like some types of IRAs and 401(k)s are treated as income and are taxable at your federal level, based on the amount of your overall taxable income. Withdrawals from taxable brokerage accounts are subject to capital gains tax on investment profits. Mutual funds can generate taxable capital gains even when you did not withdraw any money.
If your income flows in retirement are taxed as "income," here is a reminder of one key way to think through the priority of this issue to you:

2025 Marginal Income Tax Rates:

Understanding Required Minimum Distributions (RMDs)

"You can't keep funds in a traditional IRA (including SEP and SIMPLE IRAs) indefinitely. Eventually, they must be distributed. If there are no distributions, or if the distributions aren't large enough, you may have to pay an excise tax on the amount not distributed as required." [IRS Pub. 590-B (2024)]

Required Minimum Distributions (RMDs) are the minimum amounts you must withdraw from your traditional IRA, SEP IRA, SIMPLE IRA, and certain other retirement plans once you reach age 73. If this is interesting or just relevant to you see: Understanding Required Minimum Distributions

Guaranteed Income and the Nature of Your Needs May Impact Investment Withdrawl Rates During Retirement

The model below is from an AARP Bulletin retelling of "The impact of Guaranteed Income and Dynamic Withdrawals on Safe Initial Withdrawal Rates" by David Blanchett, as well as my reading of the same.

Share of your financial resources composed of guaranteed income

To use the table below, gather the following information:

  1. My annual guaranteed retirement income is: ________ [Social Security + any other source like an annuity or pension]

  2. My net worth is: ________ [real assets (bank + investment balances + home equity + any-others) minus debt (of all types)] (if you have questions about what to include in a net worth statement, see the Federal Reserve "Asset and Debt Categories in Calculation of Net Worth Flow Chart")

  3. My total financial resources are: ________ [Add the values in #s 1 and 2 above -- guaranteed income current value plus net worth]

  4. Calculate the share (%) of your total financial resources that is guaranteed income: ________ [divide guaranteed income by total financial resources]

  5. My percentage of spending that is nondiscretionary: ______ [spending that I cannot change - stuff like housing, health care, for some even food]
    Some portion of consumption/spending is sometimes discretionary. In the United States, that is not the norm for every retiree. David Blanchett argues that "Most retirees will likely have a retirement income goal that will support a combination of discretionary and nondiscretionary needs. In other words, retirees are generally able to adjust some aspects of consumption, but not necessarily all aspects (at least without a significant degree of pain). For example, some expenses may be relatively fixed in nature, such as housing and health care, while others can more easily be adjusted, such as entertainment and transportation, and still others may be a combination of the two, like food."

  6. Finally, find the squares on the table below at the intersection of your "Share of your financial resources composed of guaranteed income" and the percentage of your spending that is nondiscretionary.
                                                                        % of guaranteed income of your financial resources

% nondiscretionary 5% 25% 50% 75% 95%
0% 2.4% 3.6% 4.4% 5.1% 6.9%
25% 2.4% 3.5% 4.2% 5.0% 6.8%
50% 2.4% 3.3% 4.0% 4.8% 6.6%
75% 2.2% 3.1% 3.8% 4.7% 6.4%
100% 2.0% 2.1% 3.6% 4.5% 6.3%

The percent of guaranteed income columns represent what David Blanchett's calculations estimate how much his model predicts that you can withdraw in your first year of retirement. The annual amount is then indexed upward to match inflation. This approach -- "annual amount is then indexed upward to match inflation" -- may be overly optimistic in periods of high inflation, for example 2021/2022!

Plan for what your retirement will be

Here is an essay that will help you get started thinking: "How to Enjoy Retirement Without Going Broke", By Petter Coy, 2021-08-28,

What About Those FIRE -- financial independence, retire early -- Promoters?

Achieving financial independence early is an attractive dream. For many, the FIRE -- financial independence, retire early -- movement is linked to to the 1992 book "Your Money or Your Life" by Joseph Dominguez and Vicki Robin. My wife and I, along with a number of others read this book together in the mid-1990s and it helped shape some context for our retirement planning (but we could in no way be considered adoptees of the FIRE movement). I highly recommend checking it out of your local library and reading it -- but there are many origin stories for living simply while preparing for your financial and personal well being in the future. CAUTION: There is no magic in the FIRE community. Based on my reading and life experience, the FIRE dream generally requires extreme savings over long periods of time followed by materially constrained spending until you die. The FIRE lifestyle is not for everyone.

What About Those Artificial Intelligence (AI) Promoters?

Various flavors of AI are being integrated into the financial services supply chain. Here is an example of how one individual coached an AI service into building a financial plan for targeted individuals: https://github.com/gabrielchua/hacksg24/blob/main/prompt.txt.

Additional References:

NOTES

Note 1: Unfortunately, planning for and building a formal retirement plan is an unattainable luxury for too many people in the United States. In March 2022 the U.S. Bureau of Labor Statics reported that 65% of civilian workers had some access to medical care and retirement benefits with 71% of them participating -- (24% defined benefit and 55% defined contribution), see the U.S. Bureau of Labor Statics' 2010 – 2022 historical Excel dataset (XLSX). [Get the latest Employee Benefits Survey numbers here] That leaves ~35% of American civilian workers without access to employer sponsored medical care and retirement benefits. In 2019 families with the lowest 25% of net worths in the U.S.[page 10], had a median (the middle value in the data set) income of $29,900, and mean (average) income of $37,900 -- leaving little excess for saving/investing. Systemic and cultural barriers constrain opportunities for some, especially those most impacted by America's original sins -- genocide and slavery. Also see: https://www.stlouisfed.org/open-vault/2020/december/has-wealth-inequality-changed-over-time-key-statistics, https://www.stlouisfed.org/on-the-economy/2022/may/single-mothers-slim-financial-cushions and "The Distribution Of Household Wealth By Race And Ethnicity" & "Distribution Of Household Wealth By Amount of Wealth and Race of Householder 2022" on pages 2 & 3 of Wealth of Households: 2022 (published November 2024). For example, in Central Iowa, United Way recently reported that "36% of Black and 19% of Latino households have $0 net worth". I understand some of these abstract facts but don't understand the nature and scope of societal evolution that could eliminate this curse -- the Washington Center for Equitable Growth offers some policy ideas. For anyone caught up in the American Justice system (Native Americans and African Americans are over-represented there) costs and fees throughout the court, jail and prison systems pose another systemic force resisting any accumulation of individual's or family's wealth -- generally when they have few resources, forcing them into debt and damaging their credit ratings. Kirk Semple and Jonah M. Kessel examine how court debt extracts wealth from some of the nation’s poorest people is counterproductive and can further destabilize society.

Note 2: Cryptocurrency (crypto), a large, complex, evolving universe decentralized digital currencies and infrastructure, seems misaligned with most of our retirement wealth accumulation and income generation needs. Cryptocurrencies play a material role in criminal activity across the globe. Cryptocurrency exchanges tend to resist participation in 'know your customer' and other crime-resisting measures. More than a few cryptocurrency platforms have suffered large-scale losses -- and some of those appear to have been the result of founder's/leader's intended business model. Hostile parties stole at least US$3.2 billion worth of cryptocurrency in 2021, and in the first three months of 2022 they have stolen another US$1.3 billion. Cryptocurrency mining and use of underlying blockchain technology for recorkeeping seem excessively energy consumptive (i.e., environmentally destructive). Administering transactions via blockchain technology can, at an operational level remain largely opaque and introduces a spectrum of fees that aren't itemized in traditional financial services (leading to surprises for too many). The lifecycles of some cryptocurrencies have appeared to be little more than unregulated pump-and-dump, digital grifter schemes. There are also newer entrants into this crypto marketplace preying on other's fear of missing out. Paul Krugman argued that "there's growing evidence that the risks of crypto are falling disproportionately on people who don't know what they are getting into and are poorly positioned to handle the downside." I recognize that cryptocurrencies have generated returns for some, but I believe it would be an investment mistake to draw too many parallels with more traditional forms of investing and units of wealth accumulation. As of Q2 2023, I do not view cryptocurrency as a material component in any risk-reasonable retirement portfolio (except for those who maintain large-scale multi-generational wealth, where it may have a place in their diversification program). See: https://www.investopedia.com/tech/what-are-legal-risks-cryptocurrency-investors/, https://legal.thomsonreuters.com/blog/cryptocurrency-risks-to-your-institution-and-the-regulatory-landscape/, and a little dated https://www.forbes.com/sites/dantedisparte/2018/07/21/beware-of-crypto-risks-10-risks-to-watch/?sh=1b5fd7d5f17f.
Honestly, I often think anyone who is not a professional investor might -- given the odds of realized returns -- be better off buying a lottery ticket every time they catch themselves thinking about investing directly in cryptocurrency. Here are some sample lottery winning odds (it costs $2 US per ticket to play):

Match Powerball $ Powerball Odds Mega-Millions $ Mega-Millions Odds
5 + 1 Jackpot 1 in 292,201,338 Jackpot 1 in 302,575,350
5 + 0 $1,000,000 1 in 11,688,054 $1,000,000 1 in 12,607,306
4 + 1 $50,000 1 in 913,129 $10,000 1 in 931,001
4 + 0 $100 1 in 36,525 $500 1 in 38,792
3 + 1 $100 1 in 14,494 $200 1 in 14,547
3 + 0 $7 1 in 580 $10 1 in 606
2 + 1 $7 1 in 701 $10 1 in 693
1 + 1 $4 1 in 92 $4 1 in 89
0 + 1 $4 1 in 38 $2 1 in 37

The Powerball and Mega-Millions numbers in the table above were valid on 2024-03-27. The games also include ways to "enhance" you winnings by purchasing multipliers, but the simplified version above is only to illustrate my disbelief in engaging directly in cryptocurrecy markets as a risk-reasonable component of a retirement investment portfolio for almost all of us.
Also, hostile nations use cryptocurrencies to avoid sanctions and industry practices and rhetoric seem too often to support this activity under the general frame of "freedom." In the context of the Russian (Putin's) war to crush Ukraine and the Ukrainian people, and annex Ukraine's territory as it's own some boosters are highlighting cryptocurrency as a tool for sanctions-dodgers -- which seems like a useful real-world example of a mis-use case. This is real war of aggression -- doing what this type of agression has always done, industrial-scale murder, destruction of physical and operational infrastructure, along with destruction of industrial, agricultural, and social governance capacity, and individual human and collective suffering on a national scale -- laying waste to a democratic nation of 43 million people. Highlighting cryptocurrencies as a way to support portions of the Russian war-time economy (while generating profits for cryptocurrency insiders) is by any measure not something for normal economic market participants or for supporters of democracy and human decency. North Korea (Democratic People's Republic of Korea) steals money to help fund its nuclear arms activities. One of its hacking teams called the Lazarus Group, recently stole around $620 million in cryptocurrency Ethereum from the video game Axie Infinity (the hackers infiltrated part of the underlying blockchain that powers the game, Ronin) after stealing nearly $400 million in cryptocurrency in 2021. See: "North Korean hackers linked to $620 million Axie Infinity crypto heist." By Aaron Schaffer, 2022-04-14. https://www.washingtonpost.com/technology/2022/04/14/us-links-axie-crypto-heist-north-korea/ and "North Korean Hackers Stole Nearly $400 Million in Crypto Last Year." By Andy Greenberg. 2022-01-14. https://www.wired.com/story/north-korea-cryptocurrency-theft-ethereum/
If after all that, you still think it is important to invest (cough... "gamble") in cryptocurrencies, there are ways to do so via more effectively regulated markets (you might start with a Morningstar search), or consider doing so via one or another cryptocurrency ETF, sometimes also called a crypto-based exchange-traded products or "ETP." Again, as with any investment, think it through before spending any money -- according to the Crypto Fund Research fees can be as high as 22% - 2023 Q4 Crypto Fund Report:

"A 2% management fee and 20% incentive/performance fee (2/20) is the most common fee structure among crypto funds. However, the average fees across all funds tend to be lower and vary slightly between fund types. Index and other passive strategies often don't charge a performance fee, while funds with more active investment strategies tend to have higher performance fees (and sometimes lower management fees)." (page 11)

I used to maintain a separate cryptocurrency rant at https://github.com/mccright/rand-notes/blob/master/cryptocurrency-notes.md but it is currently a virtually useless mess.
Note 3: If you are going to use a financial advisor, think about the importance of choosing one who must maintain your best interest in all investment decision-making -- one covered by the 'Best Interest' Obligation Rule 15/-1 under the Securities and Exchange Act of 1934. Full (770 page) 'Regulation Best Interest' Effective September 10, 2019 https://www.sec.gov/rules/final/2019/34-86031.pdf. Investment advisor disclosures can be hard to read. Here is an example of how one financial advisor discloses this 'Regulation Best Interest' information: https://www.wellsfargoadvisors.com/bw/pcg/forms/594020.pdf. One way to help deal with identifying trustworthiness is to consider only those advisors who have earned the certified financial planner (CFP®) designation (an individual who has received a formal designation from the Certified Financial Planner Board of Standards, Inc.) -- "All CFPs are held to the standard of fiduciary duty, which means that they must always put your interests as a client ahead of their own." Also, verify that anyone claiming to have this designation is registered with the U.S. SEC at: https://adviserinfo.sec.gov/, which also includes a report that may also identify "customer complaints or arbitrations, regulatory actions, employment terminations, bankruptcy filings and certain civil or criminal proceedings that they were a part of."
That said, just because you hear a financial advisor say the word "fiduciary" in one or another context does not mean that they are acting as a "fiduciary" for you. Today, it appears that you must have that relationship formalized in writing between yourself and a given Financial Advisor before it becomes meaningful. Here are a couple examples from large, well-established investment advice and management companies:

After 2,535 words of legaleze, one financial "wealth management" company documents in its "Relationship Disclosures" (downloaded 2024-03-26) that:

"Unless we agree in writing, we do not act as a “fiduciary” under the retirement laws when we provide non-discretionary investment recommendations to you, including when we have a “best interest” or “fiduciary” obligation under other federal or state laws."

After 1,780 words, another company says in its "Regulation Best Interest Disclosure" document (downloaded 2024-03-26) that:

"We are not your investment adviser or fiduciary unless we have expressly agreed to act in such a capacity with you in writing."

These types of guarantees might seem counter-intuitive, but I assume they were legal when they were written...
Note 4: It is hard to exaggerate the need for some money set aside for an unexpected expense or a financial market shock (and the challenges that presents for some, see NOTE 1 above). Robert Powell reported that according to a recent Society of Actuaries survey:

"When asked what they could afford to spend out of pocket on an emergency without jeopardizing their retirement security, half of pre-retirees report that they could only afford to spend $10,000 or less and more than half of retirees could afford no more than $25,000. Black/African American pre-retirees (61%) are more likely than pre-retirees in general (40%) to be impacted by an unexpected expense of up to $10,000. Among retirees, Black/African American respondents (58%) and Hispanic/ Latino (52%) said they are not able to spend $10,000 without it affecting their retirement security. This was much greater than the general retiree response (32%), according to the Society of Actuaries survey. Most financial planners recommend that you have at least three to six months of living expenses set aside for, well, emergencies or financial shocks, such as a new roof or dental work." That is a lot of money, but essential to weather the types of surprises that are a virtual certainty at one time or another. Roger Whitney, host of the "Retirement Answer Man" pod-cast advised that when unexpected spending shocks "happen in retirement – after income from work ends – they aren't as easily absorbed or worked through. To be better prepared, create options for your future self to deal with a shock. Building cash reserves above a normal emergency fund, eliminating debt to lower fixed monthly payments, or working part time can help create financial slack to help you be agile as your retirement life unfolds."

Similarly, the Willis Towers Watson's "2022 Global Benefits Attitudes Survey" (35,549 employees from large and midsize private employers in 23 markets participated in the WTW survey) concluded that "half of employees face key risks to their retirement security:"

The Great Recession and the weak recovery darkened the retirement picture for significant numbers of Americans. And the full extent of the damage is only now being grasped by experts and policymakers. There was already mounting concern for the long-term security of the country's rapidly graying population. Then the downturn destroyed 40 percent of Americans' personal wealth, while creating a long period of high unemployment and an environment in which savings accounts pay almost no interest. Although the surging stock market is approaching record highs, most of these gains are flowing to well-off Americans who already are in relatively good shape for retirement.
The 2025 BankRate/SSRS yearly emergency savings report reported that:
"Sixty percent of Americans are uncomfortable with their level of emergency savings — 31 percent are very uncomfortable, and 29 percent are somewhat uncomfortable. Only 40 percent of people are comfortable with their level of emergency savings, including 27 percent who are somewhat comfortable and 13 percent who are very comfortable."
Before 2022, the percentage had been rising, from 37 percent in 2018 to 44 percent in 2020, 48 percent in 2021, 58 percent in 2022 and 57 percent in 2023.
"Nearly 1 in 4 (24 percent) of Americans have no emergency savings at all."
Generationally, Americans' comfort with their emergency savings levels varies widely.
"Gen Zers and Gen Xers (ages 45-60) are the least likely to feel comfortable with their emergency savings — 29 percent and 31 percent, respectively — compared to 40 percent of millennials (ages 29-44) and 52 percent of baby boomers (ages 61-79)."
"Between 2011 and 2022, less than 30 percent of Americans had more credit card debt than emergency savings. But in 2023, amid a period of high inflation, that percentage soared to 36 percent, where it stayed for two years. Now, in 2025, the percentage of people with more credit card debt than emergency savings has fallen to 33 percent, but it’s still much higher than it was before 2023. On the contrary, more Americans (53 percent) have more emergency savings than credit card debt. Those percentages have hovered between 51 percent and 55 percent since 2021. Another 13 percent of Americans say they have no credit card debt or emergency savings."
"More than 1 in 3 Americans needed to tap their emergency savings in the past year. 37% of U.S. adults needed to use their emergency savings at some point in the last 12 months, as of February 2025. 80% of those people used the money for essentials, such as an unplanned emergency expense, monthly bills and/or day-to-day expenses." "...about half (51 percent) of people who used their emergency savings in the past year did so for an unplanned emergency expense, such as a medical bill or car repair; monthly bills, such as rent and utilities (38 percent); and/or day-to-day expenses, such as food or supplies (32 percent). Many people who withdrew from their emergency savings in the past year also did so in order to help a family member or friend (22 percent) or to pay down debt (21 percent). Only a small percentage (19 percent) of people who withdrew from their emergency savings in the past year did so for non-essential reasons."

A 2024 AARP Survey of 8,368 individuals independently confirmed BankRate/SSRS 2024 survey results...

In September 2024, TIAA Institute research found that only one in five Gen Zers (20% of the U.S. Gen Z population) "are setting aside any money at all for retirement," but that "two thirds of Gen Zers who are saving for retirement use 401(k)s."

The median average credit card interest rate for March (2025) is 24.2 percent, according to Investopedia.

I understand (see NOTE 1 above) that serious emergency savings may not be practical for everyone, but keep the need to fund some emergency savings in whatever planning you establish.
Note 5: I am aware of what may be at least one long term exception -- U.S. Series I Savings Bonds. They are inflation indexed and were paying 9.62% in the period May 1, 2022 to October 31, 2022. See: https://www.treasurydirect.gov/indiv/products/prod_ibonds_glance.htm as well as a couple articles for context at https://www.washingtonpost.com/business/2022/05/03/inflation-government-i-savings-bonds/ and https://www.washingtonpost.com/business/2022/07/20/buying-inflation-indexed-i-bonds/
Note 6: David Streitfeld wrote in May 2022 that "There are 22 million U.S. millionaires, Credit Suisse estimates, up from fewer than 15 million in 2014." In their Global Wealth Report 2025 UBS researchers said that there were 23.8 million U.S. millionaires at the end of 2024 -- which was almost 40% of the world's total (page 21).
Note 7: 'Average life expectancy' and mortality are interesting topics. Most of us can influence how long we may live. How we eat, work, interact with those around us, and more can have material impacts on our longevity. Looking at a mortality table can be eye-opening for anyone who just doesn't think about how long they will live. For a recent example see: "Provisional Life Expectancy Estimates for 2021." By Elizabeth Arias, Ph.D., Betzaida Tejada-Vera, M.S., Kenneth D. Kochanek, M.A., and Farida B. Ahmad, M.P.H.; 2022-08-31 https://www.cdc.gov/nchs/data/vsrr/vsrr023.pdf. See your "life expectancy, by age, race and Hispanic origin, and sex: United States, 2021" in the table on page 2 (at the time of writing, it says I am expected to live another roughly 17 years).

Life expectancy at birth for males in 2021 was 73.2 years, representing a decline of 1.0 year from 74.2 years in 2020. For females, life expectancy declined to 79.1 years, decreasing 0.8 year from 79.9 years in 2020

The remaining life expectancy is the expected remaining number of years of life as a function of current age, [2020 statistics](https://www.ssa.gov/oact/STATS/table4c6.html). Life expectancy at birth is indicated above the "0" current age. From: [Wikipedia](https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_life_expectancy)

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