Wednesday, October 16, 2013

Are There Other Ways to Fund Retirement?

I need your help with something.

I’ve pointed out many times that our retirement funding system simply doesn’t work for most people, and by “most” I mean around 95% of American workers approaching retirement.

On the other hand, I have spoken with many people, some of them clients, who seem to feel fairly secure in their retirement, despite not having been able to save several hundred thousand dollars over their career.

Some of those people inherited money, a home or a farm. Some had a sweet pension deal with their public or private employer. My optometrist loves his job and is still working as he approaches 80.

Others found a home in an area with a very low cost of living. (One retired to Ecuador.)

I’m curious about what other circumstances may have secured retirement for households that weren’t able to accumulate a lot of retirement savings. If you don’t believe that you will have retirement savings exceeding $200,000 by the time you retire, but you feel pretty good about your retirement prospects nonetheless, please add an anonymous (if you wish) comment to this post below.

Please describe in a few sentences why you expect to enjoy a satisfactory retirement despite limited savings.

If you prefer, e-mail your thoughts to me at

Maybe your thoughts will inspire someone else in a similar situation.


P.S. Same goes for retirement finance questions you may have. Post a comment to any blog or email me at the address above and I'll get back to you.


  1. I'm a little surprised you've found folks who feel optimistic about their retirement finances, even though they haven't saved much. We're saving as best we can, but I can't help feeling the knuckleheads in Washington could wipe us out at any time. Uncertain - that's how I view our retirement prospects.

    1. Maybe I should have chosen a better word. I have talked to households with $2M or more saved and they were seriously concerned about their retirements. That's just how screwed up this retirement system is.

  2. I have been a financial advisor for 17 years and worked with many people that have very modest accumulations for retirement. However, what I have found is that over the years, their lifestyle, what they need to spend, has adapted to their limited income and modest means. They simply do not lead, in any way, extravagant lifestyles. BTW, I really like your work and approach, Dirk.


    1. Mark, thanks for sharing, and for your compliment.

      This is undoubtedly the most common strategy that will be used to address inadequate funding.

      I'm especially glad to hear from an advisor who works with people of modest means. Let's face it, the most efficient way to spend down a large portfolio in retirement isn't a problem that most people have.