Yes, You Can Still Retire

Here are the real roadblocks to a comfortable retirement and how to get around them.

by Jean Chatzky
Photograph: Illustration: Yuko Shimizu

I fondly remember checking the balances in my retirement accounts during the summer of 2007. I’d surf from my 401(k) to my IRAs, amazed that I’d made thousands since the week before by doing absolutely nothing. I’d spend the money in my head, wondering, Is 60 too early to retire? Is 55?

Then October rolled around, the markets plummeted, and as fast as that, a collective $2.7 trillion disappeared from the retirement accounts in this country, including mine. Unemployment soared, and it wasn’t long before I—like women everywhere—was asking myself different questions. Can I still retire comfortably? Can I retire at all?

Surprisingly, the market is not what’s likely to stop you. When economists at Dartmouth College and Texas Tech University analyzed the assets of people in their fifties, they reached an unexpected conclusion: The roller-coaster ride of 2007–08 will probably delay this group’s retirement for only one and a half months on average; 10 percent will be forced to delay for a year or more. And this was determined before March’s big rebound.

But that doesn’t necessarily mean you’re on track. Here are the other obstacles that could stand in your way and how to overcome them.

Roadblock 1: You don’t have exact financial goals

Truthfully, it is impossible to predict your precise retirement needs. Sure, family history can help you guess how long you’re going to live, and you can use economists’ assumptions to make calculations about inflation and the rate of return on your portfolio. But there are so many variables (what will a pound of organic arugula cost in 2032, anyway?) that even experts such as Jack VanDerhei of the Employee Benefit Research Institute (EBRI) say there is no “correct” amount of money every woman should have for retirement.

The key is to get a realistic range, and the place to start is with a retirement calculator—or four. (I like the ones at T. Rowe Price, CNNMoney, the Motley Fool and Because the math they employ varies, I suggest using several calculators until you see enough consistency to ensure that you’re in the right zone. These calculators will ask you to make certain assumptions. For return on your portfolio, use 8 percent if you’re in your forties or fifties and 6 percent if you’re 60 or older. (You’ll be taking on less investment risk as you age, so you’ll see a smaller return.) For inflation, use 3 percent. When it comes to how much you’ll need to spend—or the percentage of your preretirement income you’ll need to replace—use at least 100 percent. If you plan to travel the world or if you have a troubling family or personal medical history, go with 120 percent. You’ll also need to know how much you can expect from Social Security (go to to get your most recent benefits estimate).

Less than half of all workers have ever tried to calculate how much money they’ll need in retirement. And that is an enormous problem: Unless you know where the bar is, you’ll never be able to jump over it. So do yourself a favor and take a few hours this weekend to just get it done. Then write a note to yourself to repeat the exercise every year or two, because not only might the balances in your accounts shift but your plans might as well.

Roadblock 2: You’re not saving nearly enough

Now that you have your goal, it may be clear that you’re not socking away enough money to get there. You are not alone. “The overarching problem is not that the market went down,” says financial adviser Frank Armstrong, author of Save Your Retirement. “It’s that people haven’t saved enough.” This is truest for workers whose employers don’t sponsor plans, says EBRI’s VanDerhei. Women, too, have a particular problem. Even when we work full time, we’re the ones who take months or years off to care for children or aging parents. During those sabbaticals we typically don’t save for retirement, which is one reason the balances of 401(k)s owned by women ages 50 to 59 average only 54 percent of the balances of 401(k)s belonging to men of the same age.

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