Spooky Numbers.
Americans will spend north of $2.5 billion on Halloween this year. Candy Corn, M&M’s, Milky Way, and Junior Mints will be tossed around like candy on Halloween night. In addition to candy, Americans will spend money on elaborate costumes, haunted houses, and extravagant decorations.
Eighty percent of the annual pumpkin crop is available for picking in October. The largest pumpkin on record weighed 1,340 pounds.[1]
When I was a young trick-or-treater I would bring home a king’s ransom worth of candy. One lady on my street gave each young masquerader five shiny pennies. Each year it was the same thing – five pennies. Today, the inflation adjusted value of this gift is eleven cents.
Here are a few more scary numbers.
Per Time Magazine, 1 in 3 Americans have zero ($0.00) saved for retirement and 42% of millennials have yet to start saving for their golden years.[2]
Individuals in their sixties have an average retirement balance of $172,000.[3] If you withdraw 4% of this account balance, you’ll generate about $6,800 per year in annual income.
The average monthly Social Security check is $1,176. The annual figure is $14,112. How long can you support your current lifestyle on $14,112? Social Security accounted for 38% of a retiree’s income.[4] Where does the other 62% come from? You!
A twenty-five-year-old worker who saves $10,000 annually until age sixty-seven will have $2.3 million dollars. If he waits until age fifty to get serious about saving for retirement, his $10,000 annual savings will be worth $308,402 a difference of almost $2 million.[5] Procrastination can be frightening when trying to plan for retirement.
What can you do to insure you have a sweet retirement?
Start saving early. The earlier you start saving for retirement, the more money you’ll have in your bucket. On Halloween night if I left at 7:00 instead of 8:00, I would get more candy.
If you work for a company with a company sponsored retirement plan, sign up as soon as you’re eligible. A worker under the age of fifty can contribute $18,000 while a worker over the age of 50 can add $24,000. If these amounts aren’t in your budget, try to save 10% of your income.
Automate your savings. Automation will allow you to make timely contributions to your investment accounts. You can automate everything – savings, IRAs, 401(k)s, etc.
Don’t get spooked by stock market dips and dives. The stock market has fallen and risen for hundreds of years. When the market goes through a few lean years, use it as an opportunity to load up on great companies. When I returned home from trick-or-treating I endured a few popcorn balls, apples and pennies before I got to the good stuff. It’s the same with investing, your patience will be rewarded.
Last, have a plan. Your financial and investment plan will help guide you to the promise land. Before my friends and I left the house in pursuit of candy riches, we planned our route. We knew which houses had the best candy and we planned accordingly!
The older you get, the harder it is to find someone willing to share a horse costume with you. – Anonymous
Bill Parrott is the President and CEO of Parrott Wealth Management. www.parrottwealth.com
October 25, 2016
[1] http://www.pumpkinfresh.com/facts.htm, website accessed on October 25, 2016.
[2] http://time.com/money/4258451/retirement-savings-survey/, Elyssa Kirkham, March 14, 2016.
[3] http://www.fool.com/retirement/general/2016/03/21/the-average-american-h..., Matthew Frankel, March 21, 2016, The Motley Fool.
[4] http://money.usnews.com/money/retirement/articles/2011/08/30/retirees-in..., Emily Brandon, U.S. News, August 30, 2011.
[5] Money Guide Pro Cost of Waiting Calculator, growth rate of 7%, past performance is no guarantee of future results.