Save

The word of the wise is this: Save! Don’t spend to the max, save.

Who’s got some advice for us?

For many Americans, the golden years are quickly taking on a tin-like hue.

After a vicious decade of no growth for the stock market, including two 401(k)-eating bear markets and persistently sky-high unemployment, more Americans are finding themselves in their 50s and 60s with practically no money saved for retirement.

“We were in our 30s, blinked, and now we’re our parents’ age,” says Alan Tipps, a corporate jet pilot who typically earns more than $100,000 a year when he’s working. But Tipps, 52, has been laid off three times during the past four years, and says that has forced him to burn through what was in his 401(k) just to “keep the lights on” in his home in Portales, N.M.

Investors of all ages have suffered. But for those close to retirement, it’s been especially tough, because they’re faced with taking distributions from investment portfolios that in some cases are a fraction of their peak value. Forced early retirements and the near extinction of pensions are making things worse, creating a generation of aging investors in which some have little or no plans for how they’re going to pay for retirement.

It gets more ominous, given the other changes Americans are facing. Declining property values have drained home equity that many retirees might have counted on. Meanwhile, the number of people reaching retirement age is soaring as the Baby Boom generation ages.

Saving early and often is the way Americans typically fund their retirement, the biggest financial obligation most will face. Pensions for many have become a thing of the past. Retirement needs vary greatly, but the numbers are universally huge. A 65-year-old retiree would need to have $1.1 million saved to draw $50,000 a year in inflation-adjusted dollars, assuming 3% inflation and a 5% annual return from investments. That’s if the investor is lucky enough to get a 5% return, which, given the flat-line returns of stocks the last decade, might give some pause.