YOU MAY BE SAVING and investing for retirement. But what you’re really doing is buying future income. How much income? That brings us to a little number crunching, which I hope will illuminate five key financial ideas.
Let’s start with the numbers. Imagine stocks notch 6% a year, but inflation steals two percentage points of that gain, so you collect an after-inflation annual return of 4%. If you socked away $1,000, what would it be worth in retirement?

YOU WILL RETIRE ONE day—and, if you want to spend your final decades in even moderate comfort, it won’t be cheap. Not too concerned about saving for retirement right now? Here are five uncomfortable realities:
1. You’ll almost certainly live to retirement age. Sure, you could go under a bus before then. But that isn’t something you should bank on: If you’re age 20 today, there’s an 85% chance you will live to 65,

AS I CHILD, I REMEMBER reading a series of “choose your own ending” adventure books. These novels allowed the reader, at different junctures, to choose how they wanted the main character in the book to proceed. I always enjoyed rereading these books, creating a different story each time I progressed through the pages.
At this point in my life, I’m beginning to feel like my eventual retirement is a bit of a “choose your own ending” adventure.

WHO’S YOUR WORST financial enemy? Got a mirror? For millions of American workers, their employee benefits play a significant role in their financial life—and yet this noncash portion of their compensation is often undervalued, overlooked and misused.
I designed and managed employee benefits for nearly 50 years. During those years, I tried every form of communication I could think of to get employees to pay attention to their benefits. I retired with a sense of failure.

A FEW YEARS BACK, I was conducting a retirement planning seminar. At one point, I talked about survivor benefits under our company’s pension plan. As I outlined the benefits, I noticed a strange look on one woman’s face. She was the spouse of an employee.
A few minutes later, I spoke about health benefits, explaining that a surviving spouse was required to pay 100% of the premium. Upon hearing that, the woman took a rolled-up newspaper and began beating her husband about the head.

IS WHAT YOU’RE PAID what you’re really paid? Probably not. The compensation that you don’t see each payday has a tremendous impact on your financial security and your future standard of living—and should affect how much you save and how you invest.
Defined benefit pension plans can be the most valuable form of noncash compensation. Health benefits for active and retired employees are a close second—especially so because they’re tax-free compensation (and hence a huge revenue loss for the federal government).

IN LATE MARCH, I SET out into the backcountry of central Oregon with eight other women, all on snowshoes or cross-country skis. We traversed more than 22 miles in the heart of the Oregon Cascades, breaking trail and staying in huts. The terrain was steep, the visibility was poor, the snow was deep and there was a stiff wind.
What does this have to do with investing? The trek was reminiscent in three ways:
Feeling inferior.

BY ALL ACCOUNTS, I’ve won the game. I know the income my family needs to live our desired lifestyle. I have an inflation-adjusted Navy pension in my future. I have two children and two GI Bills, one for each child. My house is paid off and I’m debt-free. Combine all of this with the 4% rule, and it seems I have enough to produce our desired income for the rest of my life. I have “won the game.”
William Bernstein. 

IT’S PROBABLY NO surprise I gravitated toward a career in the sciences: I love compiling data. My master’s thesis was 150 pages of charts, graphs and tables that summarized two years’ worth of research.
When it comes to my finances, I’m equally compelled to gather data. I do so, in part, to create a set of documents that are more tangible than the pixels that make up the account balances on my computer screen.

TIME VALUE OF MONEY, asset class, diversification, dollar-cost averaging: This is the language of investment professionals. But it isn’t the language of everyday Americans, including those saving for retirement in their employer’s 401(k) plan.
Trust me, I know. During my nearly 30 years overseeing 401(k) plans, including providing financial education to participants, it became clear to me that using such plans as intended wasn’t easy for most people.
For diversification, employees would often invest in several different mutual funds all focused on a similar collection of U.S.

I’VE BEEN EMPLOYED on at least a part-time basis since I was 17 years old. For almost three decades now, I’ve been working fulltime. It’s probably not surprising that, at almost 51 years old, I’ve reached the point where I spend considerable energy contemplating a life beyond work.
The idea of achieving financial independence and retiring early—captured by the acronym FIRE, short for financial independence/retire early—is never far from my thoughts. As a born planner,

LIFE MAY HAVE BEEN nasty, brutish and short at one time, but it sure isn’t today. Thinking ahead to retirement? Forget the famous quote by 17th century English philosopher Thomas Hobbes—and ponder the famous wager suggested by 17th century French philosopher Blaise Pascal.
As Pascal saw it, it’s rational to believe in God. If you believe and it turns out God doesn’t exist, the price is modest: an hour lost from every Sunday morning and a little less immorality.

WHEN I FIRST encountered the acronym FIRE on Bogleheads.org, I had no idea what it stood for. It didn’t take me long to decipher the wordplay. More problematic: figuring out what FIRE—financial independence/retire early—is all about.
Studies show over two-thirds of Americans have left behind fulltime work by the time they’re age 66. But many retirees continue to work part-time because they don’t have the financial resources to avoid working altogether. A 2015 GAO study found that 52% of households age 65 to 74 had no retirement savings—and,

TED BENNA, INVENTOR of the 401(k) retirement plan, famously once stated that the system he created should be “blown up.” Why? It isn’t the fundamental structure, which he still believes in. What he doesn’t like is the complexity and costs that characterize today’s typical 401(k).
The original 401(k)s, he likes to point out, had just two fund options. Today, it’s more like 20. Because of that, it’s all too easy for bad investments and high fees to sneak in.

BACK IN 2013, I WAS recently divorced, living on my own for the first time and utterly naïve about investing. I was in my late 40s, I’d lost half of my small state pension in the divorce and I was afraid I’d be working well into my 70s if I didn’t get my financial life on track.
I set the ambitious goal of having a net worth of $500,000 by 2022, when I’ll turn 55.