disrupted Americans

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Even worse, a fifth don't expect to recover. Here's how to save your retirement from the same fate.

How would you like to delay your retirement,  work into your 70s, and die broke?

This scenario might be inching closer to reality for many Americans — at least according to a recent study from TD Ameritrade with the thrilling title, “2015 Financial Disruptions Survey.”

What’s a “financial disruption”? Anything that causes you to stop or slow your retirement savings. That’s “anything from job loss, buying a home and poor investments to supporting other family members, health issues, divorce or education costs,” says Brendan McManus, Senior Manager of Communications at TD Ameritrade.

Altogether, Americans have missed out on $2.5 trillion in retirement savings in the past five years because of these disruptions, TD Ameritrade calculates.

“When a disruption occurs, often one of the first things individuals stop doing is contributing to their retirement savings,” McManus says. On average, their savings drop about $300 a month. Half of them also have to borrow money or take out existing savings. It takes a long time to get back into that saving mode.

“The average recovery time from a financial disruption is nearly 5 years and during that time the average American loses more than $16,000 in retirement savings,” he says. “That’s a huge economic hit,” which causes half of disrupted Americans to delay retirement, or abandon the idea entirely.

This is supported by a new study from CareerBuilder, which found that 12 percent of workers over 60 don’t think they will ever be able to retire. And 54 percent say they’ll keep working, even after they retire from their current career.

So what can you do to avoid this fate? Most of these disruptions are beyond your control, but how you prepare for them isn’t. McManus offered this advice…

1. Limit credit use, or track your finances more carefully

A different TD Ameritrade survey of retired baby boomers who were successfully prepared for retirement found that the number one reason they pulled it off was because they weren’t dependent on credit.

“A good lesson Gen X and Gen Y can learn is to limit the use of credit as much as possible in earlier years, to prevent a situation where credit card debt is eating into income that could be invested for retirement,” McManus says.

If you’re closer to retirement and have credit card debt, you should have a solid understanding of your income and expenses; as well as a plan of how much you expect to spend while you are in retirement. Having it all going on a credit card and coming back off muddles the math.

“Having a clear picture will help make certain retirement choices — such as downsizing, scaling back financial support for adult children, reducing planned spending in retirement like travel, or even working longer,” McManus says.


2. Save a greater portion of your income — starting now

Maybe you’re just starting your career and you don’t have extra savings to put into retirement. Maybe you had to find a new job after the recession and had to take a pay cut. But that doesn’t mean you should put saving on hold. You can’t afford to wait.

The number one regret of “disrupted Americans” was that they wished they had saved a greater proportion of their income. Starting to save for retirement as early as possible can help you start making a financial cushion; and gives your money more time to grow. If your employer offers a matching 401(k) for employees, take advantage of that. But even if you don’t, you can start your own retirement fund — called myRA — with as little as $25.

That way when you do experience a financial disruption,  you’ll at least have a cushion of retirement savings.

3. Talk about long-term planning and saving with  a partner

McManus said the survey revealed that those who discussed their long-term financial plans with others prior to the disruption were more likely to have recovered financially.

“Whether it’s a spouse or a significant other or even a financial adviser, having money discussions are important to weathering any financial storm,” he said. It’s harder to deal with financial trouble on your own.


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Meet the Author

Jess Miller

Jess Miller


Miller is the former assistant editor of


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