Law School
Personal Finance

Are you saving too much for your retirement?

The New York Times has an interesting article about a report showing Americans are saving too much for retirement. According to a small group of economists, all the talk about negative savings rates in America is overstated. They argue that financial companies like Fidelity and Vanguard have an economic incentive to overstate how much people need to save because they earn fees on managing the money. The result it people save more money than what they’ll actually use in retirement. Mr. Kotilkoff, one of the economists, said we “we could end up squandering [our] youth than [our] money.” He suggests not to worry too much about saving because you’re probably already in OK shape.

I’m skeptical. While think that Kotlikof makes a good point about financial companies overstating the amount they save so they can make a profit, I think that’s a stronger argument for taking care of your own investment portfolio than the argument that Americans are saving too much. Even if I don’t use all my money during retirement, I think it would be nice to leave some for my posterity. Plus, my personality type is the laborious ant-working and saving in order to be prepared for the worst case scenario- as opposed to the grasshopper. The report is something to think about. However, I’ll keep socking my money away.