Mission Retirement 2 - 5:31
	SEGMENT 2: HOW BIG A NEST EGG? NARRATOR: RETIREMENT TAKES A LOT OF MONEY… PEOPLE LIVING LONGER, INTO THEIR 80S AND 90S … MOUNTING HEALTH CARE COSTS … LONG-TERM INFLATION … IT ALL ADDS UP. RELYING ON SOCIAL SECURITY ALONE WON'T BE ENOUGH… FOR MOST MIDDLE CLASS AMERICANS, SOCIAL SECURITY WILL PROVIDE ONLY 35-40 PERCENT OF PRE-RETIREMENT INCOME… MOST OF US HAVE NO IDEA HOW BIG A NEST EGG WE'LL ACTUALLY NEED… OR HOW MUCH WE SHOULD BE SAVING EVERY YEAR… THAT MEANS THE VAST MAJORITY ARE NOT WELL PREPARED. Sequence of Ext of Perot systems… going inside to workers and to Rich Kidner… NORTH OF DALLAS IS A TYPICAL NEW ECONOMY COMPANY, PEROT SYSTEMS… LIKE MANY COMPANIES, IT OFFERS ITS WORKERS A 401K SAVINGS PLAN … AND IT'S UP TO THE EMPLOYEES TO GET INVOLVED IN SAVINGS FOR THEIR FUTURE… RICH KIDNER MAKES ABOUT $40,000 A YEAR AS A SERVICE DESK ANALYST AT PEROT. HE HAS A MORTGAGE AND TWO CARS. AND HE'S 56… AN AGE WHERE RETIREMENT IS VERY MUCH ON HIS OWN MIND… Kidner I want to be able to afford to play golf every day or every week you know I don't want to have to sit home and sit in the house and worry about can I make my air conditioning payment. You know, “Am I eating beans and franks tonight?” Sequence of Perot workers… LIKE MANY IN THE WORKFORCE TODAY, KIDNER CHANGED JOBS SEVERAL TIMES AND WASN'T UNTIL HE WAS IN HIS 40's THAT HE GOT SERIOUS ABOUT SAVING FOR HIS RETIREMENT… Kidner I looked at my life and I'm going like, “I'm age 42, I'm not 30 anymore instead of 30 years to do this project in I now have you know, 20 years.” WHEN HE JOINED PEROT SYSTEMS IN 1992, KIDNER JOINED THE 401(k) PLAN… OVER THE PAST 14 YEARS, HE'S BUILT A NEST EGG OF $120,000… SOUNDS GOOD… BUT IT'S WELL SHORT OF WHERE KIDNER NEEDS TO BE JUST NINE YEARS BEFORE NORMAL RETIREMENT. Kidner KIDNER:// I don't think I'm going to get to the end of my career and be standing in the soup line, but you know instead of $3,000 a month that I'm currently being paid let's say that my income might only be around $1,500. Montage of workers on crowded streets… IT'S A PRETTY TYPICAL PROBLEM FOR LOTS OF AMERICANS… WINDING UP WITH TOO SMALL A NEST-EGG BECAUSE THEY STARTED SAVING TOO LATE… SET ASIDE TOO LITTLE EACH YEAR… AND DIDN'T HAVE A REALISTIC TARGET FOR RETIREMENT SAVINGS. Matt Greenwald Yogi Berra once said, “If you don't know where you're going, you're likely to wind up someplace else,” and that describes most people's financial preparation for retirement. They don't' know where they're going, and most people are likely, unfortunately, to wind up some place else - someplace they don't like. HS going into EBRI offices… THE TARGET IS KEY… JUST HOW BIG YOUR NEST EGG NEEDS TO BE MAY COME AS QUITE A SURPISE TO MOST PEOPLE, ACCORDING TO THE EXPERTS AT THE EMPLOYEE BENEFIT RESEARCH INSTITUTE… Hedrick Smith What's a realistic target for people who want to sustain their middle-class standard of living and expect o have a reasonably long and healthy life? Dallas Salisbury A realistic target for an individual family is 20 times their final annual income. Hedrick Smith To get to 20 times your final earnings, what do you have to save each year as a percentage of your income, you and your employer together? Dallas Salisbury If you save a full working career of 40 years and you save between yourself and your employer about 15 percent each and every year, then you'll get to where you need to be. The longer you wait to start, the higher that percentage will have to be. Charlie Bock at the computer… NARRATOR: STARTING EARLY IS A LESSON TAKEN TO HEART BY ONE OF KIDNER'S CO-WORKERS, 27-YEAR-OLD CHARLIE BROCK … Charlie Brock As far as 401(k), I started with zero dollars and today five and a half years later, I've got almost $15,000, over $14,000, so I think that's pretty good. BUT LIKE MOST AMERICANS, CHARLIE BROCK ISN'T SURE. HE HASN'T DONE THE HARD ARITHMETIC OF ADDING UP HOW MUCH MONEY HE'LL ULTIMATELY NEED FOR RETIREMENT… Brock BROCK: If I had to guess a total nest egg, I would think probably $300,000. I'm not sure why I say that number. // CHARLIE BROCK IS IN FOR A SURPRISE. BY THE TIME HE RETIRES, HE HOPES TO MAKING 70,000 DOLLARS A YEAR. HE'LL NEED 20 TIMES THAT IN HIS NEST-EGG. Brock We need 20 times. So ten times is $700,000. So, $1.4 million would that be right? On a $70,000 salary- 1.4 million. That's, that's a lot larger than that $300,000 I ball parked earlier. Yeah. That almost seems unrealistic. Hedrick Smith Can- can Charlie Brock (?) do it? Can he save $1.4 million? Matt Greenwald Certainly. Saving $1.4 million is not that difficult for a person who is willing to set aside some things to have a financially secure retirement. He's going to be able to live the life he wants, not the life that accidentally happens to him. And most people are going to live in retirement the life that accidentally happens to them, because they don't have options, because they're limited financially.