In one example, he addresses the problem of more contributions coming later in life when they have less time to grow: "What if you don’t get around to saving for retirement for the first 10 years of your career... so you only have 30 years to save for retirement?" However, I strongly suspect this underestimates the effect.
Now, doubling, or a bit more than doubling your savings ain't hay, but it is also not as dramatic as often suggested. To put it in the harshest possible terms, a 2X difference in final retirement nest egg may be the difference between the retirement you want and a somewhat-pinched retirement you have to settle for, but it is not the difference between life and death, particularly if Social Security is in the picture.
I think he's right, and I think this has been mentioned in the forum from time to time.That brings us to a perverse conclusion—one I’m almost reluctant to mention: Because savings are so crucial, and because they’re the key driver of your ultimate nest egg, how you invest is somewhat less important.
Savings rate is the most important retirement savings decision, not only because of the math but because of the way it drives your financial mindset and habits. The basic raw stock/bond risk decision comes second. And the finer details--index or active, factors or total market, alts or no alts--are a distant third.
Obviously this is not the message that any interested party in the investment industry wants to send. If I may quote a horrible example, this is what people want to believe and this is what the investment industry often insinuates:
Those who must not be named wrote:A smarter allocation can increase your nest egg by 50 percent. That's a lot easier than increasing your savings by 50 percent.