A grandfather smiles as he scoops up his grandson from a large, well-manicured lawn. Several women clink glasses and laugh over their white-tablecloth meal. A gracefully aged couple looks at one another lovingly, wind in their hair, aboard a keeling sailboat.
These are, of course, scenes from retirement commercials that are stuffed between TV segments. They're filled with visual promises of the life you'll one day have.
The problem is that these commercials - and more broadly, the way we think of retirement -- reflect a life that so many Americans want to have, but increasingly, very few will attain.
A more realistic image is much more modest. Only one in five Americans between 30 and 54 believe they will have enough saved for retirement, which isn't surprising, since the average couple has only $5,000 in retirement savings.
Even among those with a strong nest egg, there's concern. Lengthening lifespans, the rising cost of everyday goods and high end-of-life healthcare costs make retirement a sinkhole for savings. The financial conversations I have with those looking to retire no longer focus on financial peace of mind, but instead, on financial security.
How do we rephrase the retirement conversation to reflect our new economy? Let's start with a little honesty.
Knowing that the average savings of a worker in his 50s is $117,000, we can calculate the potential retirement income for many Americans. Accounting for inflation (3%) and strong returns (7% pre-retirement, 4% in retirement), a 55-year-old who retires at 65 will draw $1,107 a month. That isn't much to live on, even in inexpensive markets.
You can do the math: without time to build up savings, many Americans need to retire much later. Using the same savings and lifespan but delaying retirement by 7 years, the above retiree earns $2,089 a month. While still a tight budget, it's certainly a far cry from where we were before. You can see that delaying retirement makes a big difference.
But here's the bigger question: what if we don't retire at all? The idea of working in the final years of one's life has remained out of the conversation, but I'm not sure it should. For today's economy, we need to picture the last chapter of our lives as a time when we slow down, but don't completely stop, especially in terms of working. Instead of lavish purchases and leisure all day, retirement will simply refer to a time when money from savings begins to draw.
If Baby Boomers delay retirement, Gen X will remain in its career place, leaving no room for the Gen Z-ers that are trying to break into the workforce. Having started off underemployed and debt-laden, Millennials are already discouraged from saving, and in this scenario, Gen Z will feel that same fiscal pressure, continuing the need for late retirement. If masses of young people start meaningfully saving, we could break this cycle. Yet that's unlikely to happen without a complete change in the way young individuals structure their finances.
As we go into this period of changing semantics and expectations, we must not allow fear to control our investing habits. The rise of populism and the uncertainty that it brings could make 2017 very volatile for markets worldwide. Fight the temptation to rebalance your portfolio with every slip. Focus on your long-term strategy, and give the diversified set of vehicles you're using have the time they need to work. If you're struggling with your strategy, seek out a financial professional.
To be a nation that once again looks forward to the golden years, we must create more realistic expectations for what a good retirement is. Gone are the years when we can all stop working, but that doesn't mean you can't enjoy your last years. Remind yourself that retirement has always been about so much more than work. Allow your body to slow down, prioritize your family, and enjoy the life you have worked hard to attain.
This article is commentary by an independent contributor.
Dayne Roseman is a managing director at Woodbridge Wealth in Sherman Oaks, Calif.