Retirement and Savings

Save a part of your income and begin now, for the man with a surplus controls circumstances and the man without a surplus is controlled by circumstances. – Henry Buckley

At the Crossroads


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Through deliberate action, or unconscious idleness, the decision of which road to follow has already been made for many. But for the younger working adult, there is still time to choose a path that leads to a better retirement.

Present Status: An Undeniable Failure to Save

According to the January 31, 2014 report by the Bureau of Economic Analysis of the US Dept. of Commerce, the personal saving rate — personal saving as a percentage of disposable personal income – was a meager 3.9 percent in December 2013. This compares with only 4.3 percent in November 2013. (1)

Yet if you ask just about anyone in the US workforce (private or public) today, they will tell you they both want and expect to have a wonderful retirement. How will they achieve this goal?

If one ruminates long enough over all the obvious approaches, one would conclude that to achieve any real measure of life-time wealth, one must live below one’s means and save the rest.

If saving money is wrong, I don’t want to be right. – William Shatner

How much should one save?

A book written well over a millennium ago provides a sound, one-word answer: “tithe”. Saving 10% over a typical 40 year work-life is adequate. Save more? Sure. I have yet to hear someone tell me they saved “too much” money.

Example 1: A person saving $4,000/year for 40 years, and earning a compounded annual rate of return of 8%, would have $1,036,226 at retirement age.

Example 2: A person saving $8,000/year for 30 years, and earning a compounded annual rate of return of 8%, would only have $906,265 at retirement age.

Note that even though the person in example 2 saved $80,000 more ($240,000 vs. $160,000) than the person in example 1, the person in example 2 had an ending portfolio that was $129,961 LESS.


From the examples above, one can see that TIME is the most important success factor in building wealth. Summary: Start Now!


Foot Note:

(1) BEA 01/31/2014 Report:


Blog: Alfred L. Angelici

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.



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