Managing the Money Monster | Week 6: Retirement Planning (Austin Pryor, chapters 25-30)

Today’s retirees are the wealthiest in U.S. History.  Baby Boomers can reasonably expect to live 20-25 years past retirement.  It is literally becoming the “third phase” in people’s lives.  In it, you hope to move from “success” to “significance”.  Recommend to you Bob Buford’s book “Halftime”, which will both encourage and stimulate your thinking on whether the conept of “retirement” is even Biblical.  But, clearly, most people will move into a phase of their lives, whatever the name, that will mean a departure from the “I must go to work each day at  such and such a time” cycle

Here are some interesting statistics on today’s Americans, age 65 & older:

-average net worth of $100,000 per household
-75% own their own homes
-almost 80% have savings that average $20,000

Number of those joining of the ranks is increasing at twice the rate of the overall population.  By the year 2030, “baby boomers” will be, in retirement, about 20% of the population.   One of those realities is the life expectancy chart:

Life Expectancies:

Age               Men                         Women

30        50 more years              55 more years
40        40 more years              45 more years
50        31 more years              35 more years
60        23 more years              26 more years
70        15 more years              18 more years


Before we start talking about specific planning for retirement, it seems to me that we need to clarify again…we all need “free cash flow” in order to get to financial freedom.  That means giving faithfully, increasing income, eliminating debt, developing a contingency fund, and learning to be “content where we are”.  Then, as one of our overall savings goals, we begin to plan for retirement.

As a general rule, and only a target to shoot for, Austin Pryor recomends the following:

Pryor suggests 5-10% of gross income when you’re in your 20’s, 10-15% when in your 30’s and 40’s and 15-20% when in your 50”s & 60’s.


Retirement Planning Steps

  • Annual income needed in retirement:

-Current, before tax annual income(or what you would like it to be!)
-Lifestyle maintenance assumption (e.g. 60-90%)

  • Inflation assumption(suggest 3-4%)
  • Remaining years until you will retire?
  • Inflation adjustment factor(get from a table or software program); first year required income
  • How many years after retirement do you want to provide for?
  • Total amount required for your “retirement years”
  • Sources of retirement income: Social Security(probably 50%, UNLESS major changes which are likely), pension plan or retirement plan amount(defined contribution or defined benefit).  Gap equals savings amount(estimate annual return, annuities, IRA, SEP-IRA, Roth)

Christian Association of Prime Timers(800) 443-0227(age 50 and older..$12.95 dues)

“A good man leaves an inheritance to his children’s children, And the wealth of the sinner is stored up for the righteous.”(Proverbs 13:22)

“Now to Him who is able to do immeasurably more than all we ask or imagine, according to His power that is at work within us, to Him be glory in the church and in Christ Jesus throughout all generations, for ever and ever! Amen”(Ephesians 3:20-21)

Starting Next Week:  Prayer & Praise Time:  Prayer, Worship & Brief Devotional Teaching led by Lex Adams

Dr. John Jackson is the President of Jessup University. He’s the author of 10 books, the most recent being “Grace Ambassador”. He’s a transformative leader, committed to equipping believers and fostering change in their local communities… Read more

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