Are you making an incorrect assumption when it comes to your financial future? A recent article suggests that some Americans are, and that it could detract from their way of living during retirement.
According to CNN Money:
“An estimated 33 percent of Americans have no money at all saved for retirement, but an even more frightening statistic is the fact that 30 percent of those 55 and older are in the same boat. And a big reason so many of us aren't saving boils down to Social Security.
In fact, according to the National Academy of Social Insurance, Social Security is the sole source of income for almost 25 percent of Americans 65 and older.”
The Social Security Administration provides guidelines which say this benefit should only replace 40 percent of our income.
Many Americans know they need to save more to be prepared for retirement and can’t rely wholly on Social Security, yet they’re still falling short with their savings effort.
According to a recent Washington Post article
“The Natixis 2016 Retirement Plan Participant Study polled 951 workers of all ages across the U.S. who have access to a retirement plan at their jobs. Those surveyed said on average they need $878,206 to fund their retirement in order to live 22 years in retirement, but, so far they have saved only $208,333, or 24 percent of that goal.”
The survey also found that Baby Boomers on average were only 34 percent of the way to their goal, where Millennials had just 8 percent of their goal saved.
How do you know you’re on track?
Other workers have no idea what their retirement savings goal should be. In a recent Merrill Edge report, 19 percent of respondents didn’t have a number in mind.
So what should your savings goal be? There’s no one-size-fits-all number; it varies by person.
An article on CNBC.com
cites a timeline that savers could use to determine if they’re on track:
“By 30: Have the equivalent of your salary saved
By 40: Have three times your salary saved
By 50: Have six times your salary saved
By 60: Have eight times your salary saved
By 67: Have 10 times your salary saved”
Getting into a habit of contributing to a retirement account regularly can help you stick to goals, and it’s never too late to start, the article concludes.
If you want to know more about the types of accounts available for working on your retirement savings, schedule a free consultation with one of our Senior Account Executives