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The Shocking Truth About Retirement: You Won’t Run out of Money

By Mike Lynch CFP®

Financial Planner

Call it the crisis that isn’t. I’m talking about the “retirement crisis,” heralded by experts proclaiming that many Americans are woefully under-saved for retirement, the end result being they’ll run out of money before thee run out of breath. 

Google retirement crisis and more than 80 million hits appear, articles like the May 2018 U.S. News article the title of which asks, “What Happens if We All Run Out of Money for Retirement?”

The answer, according to a recent study by The Employee Benefit Research Institute, is that you won’t. In fact, provided you start with a little scratch, you may even end retirement with more money than when you started. 
The unique study, “Asset Decumulation or Asset Preservation? What Guides Retirement Spending” by Sudipto Banerjee, relies on real individuals tracked since 1992 by researchers at the University of Michigan. Breaking data down into three groups—individuals who started retirement with $200,000 or less, $200,000 to $500,000 and over $500,000—Banerjee found that the median spend down for each group was less than 30 percent after 20 years.

Those who started with more than $500,000 had spent down just over 11 percent after 20 years.
In round numbers, a 70-year-old, who started retirement with $500,000 invested, had $445,000 at age 90. One in three of this high-asset group had more assets 20 years into their retirements than they had at the outset!
The study had some less happy findings. Of the three groups, one in three had depleted at least 80 percent of their assets in the lowest asset group, dropping to on in 12 for those who started with $500,000 or more. 

A 2015 National Bureau of Economic Research study by three academics further flushes this issue out. In, “What Determines End-Of-Life Assets? A Retrospective View,” professors James Poterba, Steven Venti and David A. Wise found that two factors were associated with asset depletion: Mental illness and change of household composition from two to one. In other words, dementia and Alzheimer’s and the death of a spouse which brings, at the very least, loss of Social Security income. 

The lessons from these studies are empowering. Thirty years of real retirement research show success emerges from controlling the controllable—invest so that you start with some assets—and insure against the human tragedies of health problems and early death of spouse. 

As always, the only facts that matter are yours. Develop your plan, work your plan, and enjoy retirement on your own terms. Do this, and you won’t have to worry about being a negative statistic

Mike Lynch CFP is a financial planner with the Barnum Financial Group in Shelton CT. He can be reached at or 203-513-6032.

This article is not intended as legal, tax, accounting or financial advice. Michael is a registered representative of and offers securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. 6 Corporate Drive, Shelton, CT 06484, Tel: 203-513-6000. The opinions provided above are not necessarily those of MML Investors Services, LLC. The opinions provided are for general information purposes only.