Is Retirement a Reality Today in America by Melvin Feller MA

Is Retirement a Reality Today in America by Melvin Feller MA

Is Retirement a Reality Today in America by Melvin Feller MA

The current strategy most Americans use to save and invest for retirement is fundamentally flawed. In order to evaluate the effectiveness of any strategy in an empirical way let’s look at the final results. Then let’s compare them to the results you employed the strategy to achieve.

I will go through that very process using two well-known and often quoted studies.

First, a 2016 study performed by the Employee Benefit Research institute found that the average Baby Boomer had an average balance of $77,000 in their retirement account at retirement age. The same study performed recently, found that average balance has risen to $127,000 following the bull market of recent years.

Second, a 2018 study performed by the US Census found that the average college graduate (undergraduate) earns a little over $2M in their lifetime. Graduates with higher level degrees earned $2.5M (masters) and $3.5M (doctoral). But let’s stick with the undergraduate figure for the purposes of this article.

The math here is shocking and unforgiving! After 40+ years of working, earning, saving and investing the average “retiree” ends up with a little less than 2 years salary in their nest egg?! After four decades of tax-deferred 401K contributions, employer matches, double digit average market returns you arrive to find an account with 6% of your lifetime earnings?!

Is Retirement a Reality Today in America by Melvin Feller MA

According to Melvin Feller MA, a business consultant, many boomers invested when the market was at the peak and pulled their money out at the bottom because they were fearful. Yes, they may have neglected to invest during the early years because they weren’t thinking about retirement then. Yes, their portfolios were probably not as diversified as they should have been. And finally, yes, they could have had much more money at retirement if they had the discipline of a robot and were completely unfazed by a 30–40% drop in the market.

All that considered, some bothersome questions remain. Is this the outcome Baby Boomers signed up for when they invested their hard-earned money? If given a do-over, would they do it again? My feeling is of course not.

Is Retirement a Reality Today in America by Melvin Feller MA

The majority of retirement age folks in this predicament the only remaining option is to work much longer than they had first anticipated. But what about future retirees who are 15, 20, 30 years from retirement? After seeing the sad ending to this situation, the major question to ask, do you still follow the same path on resolve or do you shift strategy, direction and ultimately destination?

America has always been called the “land of opportunity” and nowhere is this more evident than the above example. Unlike most countries around the world, an average college graduate earns a couple of million dollars in their lifetime. Think about that. Not the outstanding, exceptional college graduate — the average. Just the average, grades are not important in this scenario.

If this average graduate simply saved a dime out of every dollar they earned and they never invested it at all, they would end up with 2 to 3 times more in their retirement account than the average retirement-age Boomers.

When you first consider investing in real estate long term, fear of loss promptly ensues. After all, there are many unknown variables:

How do you know if it’s the right property?

What if the tenants are a major hassle?

What if it doesn’t rent quickly?

What if there’s a major repair?

I put this article together in order to make one simple yet crucial point: Is retirement a reality today in America?

Is Retirement a Reality Today in America by Melvin Feller MA

When you live in a country where the average college graduate makes over $2M in earnings in their lifetime, that’s a major opportunity. If you squander the opportunity to make something beautiful, to become financially independent and built wealth, the regret will be way more painful than any temporary fear of loss. If all you have to show for millions in earnings is 40 years of expenses, that will be a shame. You should always be moving ahead financially. However, the older you get the faster you should move financially!



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Melvin Feller

President of Melvin Feller Business Group With over three decades of executive coaching, speaking, and most importantly, real-life, in-the-trenches experience.