What pictures come into your mind when you think about the word “retirement?”  Maybe a round of golf or a trip to the beach anytime you want?  Traveling?  Spending time with the grandkids?  Taking up a new hobby?  If you are already retired, are you experiencing what you expected? 

As the baby boomers creep closer and closer to “retirement age” the definition of retirement has been evolving.  Granted, some still hold onto the traditional visions of retirement.  But more and more, people are looking at it in a different way.  In the generations before us, retirement meant removing yourself from the workforce, picking up your gold watch at your retirement party, and spending your remaining years gradually slowing down.  But now, as our life expectancies have dramatically increased over those earlier generations, we are faced with more years in “retirement” and our visions are changing.

More and more of us are working past the traditional retirement age.  Many take on some part-time work or start a small business.  Is this because we want to “stay in the game” and keep our minds and bodies active?  Or, is it because we need the money?  A couple of studies released recently point to the latter…we need the money.

A study for the American Institute of Certified Public Accountants found that 40% of working Americans say that they will never be able to afford to retire…in the traditional definition.  That’s sad.  Asked how much they will need to retire, 55% said they don’t know.  That’s more than sad, it’s troubling.  And even those who think they know are way off the mark.  When those earning between $50,000 and $75,000 a year were asked how big of a nest egg they would need for a 20-year retirement, starting at age 65, they gave a median estimate of $250,000.  They’ll probably need at least twice that amount.

Even more startling is that 56% say that they cannot afford to save for their retirement.  This is probably partly attributable to the current economic conditions.  But we must also consider our priorities.  Baby boomers in particular have been known to “live for the moment.”  The “I want it now” mentality is probably one of the reasons we’re not saving as much as for our futures as we should.

Another recently released study, a survey of working Americans, really drives home that point.  The report from the Employee Benefits Research Institute found that nearly half, 46%, have less than $10,000 saved for their retirement. 

Financial literacy has always been, and still is, a big problem in our country.  For some reason, we don’t teach the basic financial knowledge we need in our schools.  As a result, it seems that a lot of Americans don’t know how to prepare for their retirement years.  And many seem to have put off trying to figure it out because they can’t save right now anyway.

Combined, the two studies paint a pretty bleak picture of what many of us will be facing in the not-too-distant future.  They strongly suggest that we are on the verge of a retirement crisis.  Jordan Amin, chairman of the National CPA Financial Literacy Commission said, “Americans don’t know how to prepare for their twilight years, and many have put off figuring it out because they are struggling to make ends meet now.”  He added, “Here’s the best advice I can give for retirement planning:  START!”