Planning for retirement? Then forget the "margaritas by the pool" and start spending less, says Ivory Johnson, director of financial planning at The Scarborough Group. She joined CNBC's "Power Lunch" to discuss sound retirement strategy -- and took the opportunity to criticize Federal Reserve policy.
Johnson's further comments are below.
Clients and Concerns
We actively manage 401(k)s and IRAs for individuals. We take a holistic approach to financial planning. They're concerned about volatility in the markets.
Current Market Outlook
A substantial amount of disposable income is the direct result of home equity extractions and 10 percent of all jobs are related to the housing market. $680 billion in ARMs will reset next year, and there is already a glut of houses on the market. I'm bearish.
On the Fed
Lowering interest rates is the most irresponsible thing we could possibly have done.
Advice to Baby Boomers Not Saving Enough for Retirement
When I was a kid, we drove to our vacation spot and stayed with a relative. Nobody in my neighborhood had a luxury car. Americans used to work from 18 to 65, retire and die the next Tuesday. Now we want to work from 22 to 55, spend $4 on Starbucks coffee and live until we're 95 on a golf course sipping Margaritas by the pool.
Baby Boomers need to:
- Spend less money today.
- Plan to spend less money tomorrow.
- Work longer.
- Take more risk in an effort to obtain higher returns.
Everyone should:
- Buy gold and commodities to protect against a weak U.S. dollar, slower consumer spending and experts who base everything on what has or hasn't happened in the past.
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Saving For Retirement:
67% Have Not Saved Enough
30% Have Saved Enough
Source: CNBC Poll