Saving Retirement, One Investor at a Time
Melody Townsend, a financial planner in Mount Sterling, Ky., says her clients have assets between $250,000 and $1 million, including their homes and 401(k) plans, with the average being in the $500,000 to $750,000 range. Most of them are in their late 40s to early 50s and want to retire between the ages of 60 and 65. Townsend feels comfortable that most of her clients are on the right track because they don't have grand retirement aspirations to travel the world and live it up.

"They're mostly middle Americans who want to garden or volunteer or go away to the beach for vacation," Townsend says. "They're not looking for a lavish lifestyle. It always goes back to the notion that it's not about what you make, it's what you keep."

And it helps that her client base predominantly lives in Kentucky, a low-cost-of-living state.

Townsend is part of the Garrett Planning Network, whose advisors charge hourly rates for planning services. But she does have a retainer service to help manage client portfolios on a year-round basis. For retirees, Townsend meets with them annually to update their retirement plan and make sure they're still on track to meet their goals. "I usually project out to age 95," she says. "If they're going to live a long time, I don't think they'll be mad at me if they still have money left."

One of Townsend's retainer clients is a 64-year-old woman who didn't save enough money and is in a public pension. To supplement whatever guaranteed money the woman will have, Townsend meets with her monthly to go over her budget and plan her monthly spending. Townsend says the woman has gone from no monthly savings to saving about $300 per month since they started meeting regularly a couple of years ago. That is more than 10% of her monthly take home pay.

"I feel like it's a big success," Townsend says. "Initially, you have to get spending under control. That's how we can ease people into it who haven't started saving yet."

Selling the Dream
How did the modern notion of retirement come into being, or even become a "lifestyle?" When the U.S. was an agrarian society, people worked until they couldn't do the heavy lifting anymore, and then downshifted toward lighter chores when the younger generation took over the farm. Essentially, there was no retirement to look forward to and no backstop to support people in old age.

According to the book, The Evolution of Retirement: An American Economic History, 1880-1990, by UCLA economics professor Dora Costa, more than 75% of men over age 64 worked in 1880, and that number was as high 47% in 1950. Today, it's less than 20%, a decline that is partially explained by the dramatic rise in the number of octogenarians and nonagenarians.

Industrialization and urbanization transformed the American social and labor landscapes, and mandatory retirement laws that hit the books during the 20th century pushed older citizens out the door--many of them against their will. Social Security and pensions helped cushion the blow, and eventually "Retire at 65" became another rite of passage to mark one's life.

Meanwhile, several decades worth of marketing by the financial services industry has sold Americans on the idea that retirement will be a golden period of leisure. And for some folks smart and/or lucky enough to cash in on the new wealth-creating industries of the past couple of decades, retirement at 50 has become a new mantra.