They’ve moved the goal posts for Americans hoping to score a financially-sound retirement — and millions of workers are going to be irked.
You’re now going to need a minimum of about $1.5 million to retire comfortably — not the cool $1 million that had been prescribed for decades.
You can thank the fact that Americans are living longer, interest on savings is low and that Social Security is no longer a foregone conclusion, according to Rebecca Walser, a tax lawyer and certified financial planner.
Walser feels $1 million isn’t as long-lasting as it used to be.
“It is really bad out there — so bad, in fact, I feel like I am sitting on a mountain and screaming at America to wake up,” Walser told The Post.
To get to the loftier goal, Walser recommends workers set aside 25 percent of that pre-tax income — rather than the 10 percent many savers put aside.
Walser makes the case for the $1.5 million goal in her new book, “Wealth Unbroken: Growing Wealth Uninterrupted by Market Crashes, Taxes and Even Death,” out this month.
Among her biggest fears, according to Walser, are monetary policies artificially propping up equities and other asset classes while fueling the huge surge in US federal debt, currently at over $21 trillion.
Failure of the troubled Social Security system and government entitlement programs may not be far behind, she says — or a subsequent rise in taxes, she adds, to shore up government finances in desperate financial straits.
Still, Walser says that with financial prudence, sound tax advice on taxable income and $1.5 million saved, Americans can retire in a better position to draw down the standard 4 percent annually — starting with $60,000 on year one, say at age 65 or later — over a typical 25 years of retirement.
And don’t count on Social Security, she said.
Financial planner Philip Kiernan, Jr., agrees with Walser’s new math.
“The premise is correct,” said Kiernan, a portfolio manager with Highlander Capital Management in Short Hills, NJ.
“Historically low interest rates require more capital at retirement to generate the same amount of income that you’re accustomed to,” he added.
Despite the Fed’s best efforts to lift US interest rates, Walser says rates may stay historically low for some time longer, and the aftermath may be no picnic as the Fed exits the era of quantitative easing.