For a millennial, just the age of 65 is an abstract concept.

But as those who came before us will attest, it can be all too real when one gets there. Especially if the bank account and life expectancy don’t match up very well. And unfortunately, that’s becoming the case all too often.

insufficient funds

Numerous factors lead into that sad situation, including these:

Social Security

Back in 1935, this system was created for purposes other than saving for retirement.

Even without other considerations, Social Security maxes at an 8% annual increase for every year you wait before claiming benefits. Taking them earlier than age 65 — and a whopping 70% of the population does — will slow the escalator considerably.

Insufficient Savings

The Boston College Center for Retirement Research publishes a National Retirement Risk Index, and it projects 52% of Americans won’t be able to maintain their current standard of living if they cash in the chips at age 65.

Of more concern is their finding that those on the verge of retiring right now are in a lesser position to do so than their parents or grandparents. Toss in a longer life expectancy these days, and that’s a disturbing scenario.

Old and still working

The Stock Market

Since 1900, there have been four extended flat-value stretches of 14 years or more.

Incredibly, in the 1980s, baseball cards were a better investment than stocks. But even they crashed when too many suppliers wanted to get in the game. The point here is, who wants to count on anything that can be compared to baseball cards as a steady investment?

Pick the wrong year to retire while counting on dividend income and you could be stuck out in left field.

Sequence of Returns Risk

This is the order in which your investments produce returns or losses. A down year can unravel steady growth exponentially.

If 2008 wasn’t enough to reinforce the fact that crashes happen, take a look at what the Chinese market is doing right now. Peaks and valleys are consistent parts of the equation, and unfortunate timing has unraveled many a portfolio.

401k nest egg broken

Clearly, no matter what your age, it’s time to do some figuring. You’ll find a simple calculator below.

It’s wise to at least attempt an accounting for inflation. And then understand that the Desired Retirement Savings (DSR) amount displayed is for the totality of your retirement. Thus, if you’re going to live to 100 — and why wouldn’t you? — first do this calculation using the desired amount you wish to have for one year:

one year’s retirement budget x [100 – (retirement age)] =  DSR

Here’s an example, using $80,000 as the amount you’d like to have available each year and planning on retirement at 65:

$80,000 x [100 – 65] = $2,800,000

In this example, you’d enter $2,800,000 as your Desired Retirement Savings amount.

If these results indicate you should consider being proactive, then do know there’s no time like the present, because the future will be upon you before you know it.

Take action now. Pledge an oath to the Yoda Code. The Dot Com lifestyle is an ideal way to make sure you don’t retire at 65. You’ll be living the life much sooner than that!