Rick Telberg

CPAs to Boomers: 'Save, Save ... and Save!'

Are boomers ready for retirement? Probably not. Are YOU ready for busy season? Sound off here.

January 22, 2008
by Rick Telberg/At Large

We sure hit a hot issue with our recent survey on baby boomers and their plans for (or should we say dreams of) retirement.

Respondents agreed — or at least 92 percent of them did — that America’s boomers are not financially prepared for retirement. They’re saving too little. They’re convinced their retirement phase won’t last long (to put it nicely). And unless they start shoveling money into their IRAs and 401(k)s at a very aggressive clip, “retirement in the golden years” is going to look more like “working in the fading light of sunset.”

So we asked CPAs and other financial types what they thought aging boomers should be doing to get ready for retirement.


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And, so far, we’ve received 746 pieces of advice, most of which boiled down to “save more.” Duh.

“Save at least 10 percent of income annually,” said one.

“Save 20 percent of earnings,” said another.

“Save 25 PERCENT of pay, now until retirement; only draw four percent of savings or less to live on during retirement,” said another.

Advice regarding Social Security was 99 percent consistent: Don’t count on it; don’t calculate it into your projected retirement income. Just one anonymous advisor saw hope, saying, “Congress will get it fixed. No one ever expected to go to the millionaire’s mansion on SS.”

Most other advice was consistent, too, and Grace B. Ghezzi, vice president of Benefit Consulting Group, Inc., in North Syracuse, N.Y., summed it up most solidly: “Save more, max retirement contributions to 401(k)s and IRAs and minimize debt.”

Sole proprietor Edward Greenlee, in Ruidoso, N.M., offered similar advice, but added a couple of other good ideas: Establish a line of credit for contingencies and have enough liquid cash available to meet six months’ worth of expenses.

Hal S. Hershgordon, JD, CPA, president of YBI Trusted Financial Advisors, Inc., in Maple Glen, Pa., recommended a healthy level of pessimism. “Obtain and maintain adequate insurance coverage, i.e., health, disability, liability,” he wrote. “Save until it hurts, then invest to address longevity risk.”

What to invest in, of course, is the advice we all need, but no one recommended specific stocks, bonds or funds most likely to carry boomers through retirement. The closest thing to a recommendation came from Brooke Salvini, principal of Salvini Financial Planning, of San Luis Obispo, Calif. “Hire a fee-only financial planner to receive objective professional advice,” she wrote, and admitted that she’s biased on the issue of “fee-only.”

Kenneth J. Peters, MST, CPA, CFE, a partner with Peters & Woodring, LLC CPAs, of Owings Mills, Md., was also a little pessimistic. “Don’t count on the government,” he wrote, and added, “Do not anticipate that up-and-comers will be able to afford to buy your present home when you retire.”

I thought Jim Eckelkamp, president of Eckelkamp & Associates, CPAs, of St. Louis, Mo., gave us a good piece of his mind: “Plan on working at least part-time beyond 65 and try to build your career so you can do what you enjoy and aren’t working at 70 at McDonald’s,” he said. “If we are going to live to 90 and beyond, and are still in school until 22, is it realistic to think only 43 years of working can support 47 years of not working? Our ancestors didn’t live that long after retirement and started their careers much younger.”

I don’t know what scares me more — withering away in a nursing home with a big pile of cash under my mattress or trying to flip burgers at the age of 96. I guess I should be happy to be doing anything at the age of 96. Whatever it is, I just hope it involves a big pile of cash.

NEXT QUESTION: Are you ready for tax season 2008? Join the survey; see the answers.

COMMENTS: Questions, rants or raves? Write Rick Telberg.

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About Rick Telberg

Rick Telberg is editor at large/director of online content.

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Disclaimer: Any views expressed in this article do not necessarily reflect the views of the AICPA or CPA2Biz. Official AICPA positions are determined through certain specific committee procedures, due process and deliberation.