Death at Your Desk

I probably wrote what I am about to share with you in my head a dozen times over the course of the last year. It’s a topic we all talk about together as agents and financial experts but rarely share in quite the way I am about to share with you now.

I will forgo explaining the math because, if you don’t know how much the average person needs right now to retire comfortably, then you are quite frankly in the wrong business. Here is a very simple breakdown of what I believe folks need to already have saved for retirement in one form or another. I will break it down by ages:

Age 30: $100,000

Age 40: $250,000

Age 50: $400,000

Age 60: $600,000

Age 70: $750,000

I bet some of you are looking at these figures and instantly disagreeing with me. Let me clarify.  Before I even get too deep into this, let me apologize to the first group of prospects.  I am sorry for all you youngsters out there who have just paid off your college debt, which by the way, now exceeds one trillion dollars nationally.  But you still need to bank as much as possible as soon as you get your first paycheck.  I haven’t met very many 30-year-olds with $100,000, but there are some out there. Moving forward, $250,000 by age 40 is very doable.  I know some 40-year-olds who are close to this number. Even though life deals us unexpected body blows that can dig into our stash, a quarter of a million dollars is by no means impossible to save by age 40.  At age 50, $400,000 is certainly a great achievement, and I presently have a client who is a hair below that number. $600,000 is also not so difficult to manage. I know prospects that have exceeded that amount in their late 50s. And finally, by age 70, most people need to be around the $750,000 mark.

By the way, these are minimum values. I don’t care if it’s in a dresser drawer or in an annuity.  Without these minimums, a person will never fully retire.  Social security should not be counted on when you speak to a 35-year-old.  I have serious doubts that our system of government hand-outs has any chance of making it another 20 years. Yes, I understand we pay into it and we are owed what we paid in one day.  Sure, no problem … if I am wrong and the money is there, let the liberal bells ring.  Either way, following my simple formula won’t hurt your clients.  As far as any other entitlement programs that may or may not evolve in the future … well that remains to be seen.

“Death at your Desk,” as I call it, is plausible because what are folks going to do with only $150,000 saved for retirement, which is on average what most folks have saved? And the saddest part about this is that when I discuss this reality with my prospects, they seem to immediately fall into a deep depression right before my eyes. All of a sudden, the plan they had for years goes poof!

Recently I sat with a married couple, one a doctor and one a retired engineer, who collectively had $1 million in their 401k for retirement. They are both currently 59 years of age. Sounds great, right? Wait, it gets better.  They had three kids, two in college and one in the wings. (And they weren’t taking any loans for the kids because they didn’t want to)  They also had a ridiculously high mortgage in my opinion.  And right before the meeting was over, the husband said to me, “Harris, if I had to write you a $10 check right now, I couldn’t.” 

I would have suggested anti-anxiety meds if one of them wasn’t already a doctor. Obviously, there was more to the story, but I think you get the point. Had they started 20 years ago with a plan, we wouldn’t have had this painful conversation.  I have many more stories like this one as I am sure all of you do. I don’t really have any specific advice to give other than do your best not to paint the picture other that what it is. You don’t want clients who cry to you every day, and you don’t need a client who gets too full of himself either.

Still, if we don’t get more aggressive with our prospects and lay it all out for them on day one, nothing we do will matter and “Death at the Desk” is a real possibility.  I will never be convinced that the truth will insult them and if it does, find clients who respect your honesty.  Remember, you are the expert. You dictate what your clients and prospects need to do in order to retire comfortably and avoid “Death at their Desks.”