Early Retirement Blog

The Federal Reserve reported that the average net worth of American households fell 22.7 percent since the recession began in December 2007 through October 2008, when the report was prepared.  Lower housing values and a plunging stock market combined to take a big bite out of American’s net worth.

However, it appears that the recession has had a much bigger impact on the wealthy, when the Fed’s numbers are more closely examined.  If the values of second homes and businesses, typically owned by wealthier Americans are factored out, then the average household net worth declined by only 12%.

The Fed report also indicates that Americans age 55-64 years old are among those hardest hit, most probably because this age group represents Americans at their peak net worth, and therefore the group with the most to lose.  While the news is not good, it is not nearly as disastrous as the mainstream media would have Americans believe, and some simple lifestyle changes are all that are necessary to adjust to a lower net worth.

If your net worth has declined due to the recession, you can still achieve your retirement goals by adopting the Green Retirement planning method, which focuses on your spending instead of your salary.  You do not need to delay your retirement, as your financial planner would have you believe, due to your reduced net worth.

Because how much you spend in retirement not your salary, determines how much savings you need for retirement, you control your retirement savings needs and retirement date.  You can still retire when you had originally planned, by simply reducing your consumption in retirement, by the percentage decrease in your net worth.  For instance if you had planned to spend $3,750 per month in retirement, and your net worth has declined by 15%, to retire on schedule reduce your retirement budget to $3,200 per month.

Green Retirement gives individuals control of their retirements, ending wage slavery, enabling people to retire earlier than traditional retirement planning allows.  Learn more about Green Retirement Planning, try our Free Retirement Calculators, and our Free Retirement Analysis.  You do not need to delay your retirement.