Are you thinking about and planning your retirement? Here is some helpful advice from David McAlvany, President of McAlvany Wealth Advisors and author of The Intentional Legacy.

“Through no fault of their own, the rules have changed. You used to be able to count on 4% of your savings to supplement your retirement income. Today, it’s no longer possible. This is for two reasons.

One, interest rates have been set so low by the world’s central banks that you can’t count on the magical 5% coming in from your bank’s certificates of deposit.

Two, in the equity markets, things are so overvalued that you now have a growing list of professional investors. This includes John Bogle of Vanguard funds, who says you can expect only 2% per year over the next decade because things are so overpriced today.

You have to lower your expectations and anticipate to draw 2% instead of 4% – which means you’ll have to save twice as much, or spend half of what you were expecting.

Clearly this isn’t good news. The practical side is that if you had your heart set on a particular retirement date, you may need to rethink that. All too often, people retire earlier than they should and don’t have enough resources to do it. And the truth is, we can work longer – we are no longer in the Industrial Age so at 65 our bodies aren’t worn out anymore.

In a nutshell, we need to work longer and save more. Not necessarily good news, but if you don’t take that advice, you’ll run out of retirement savings before your clock runs out.”