Have less than $25K in savings? Get in line
Nearly half of all workers saving for retirement have savings that fall short of the $25,000 mark, according to the 2007 Retirement Confidence Survey by the Employee Benefit Research Institute and Matthew Greenwald & Associates. Predictably, the youngest workers (ages 25-34) dominate this group - 68 percent of them have less than $25,000 earmarked for their later years. But so do half of workers age 35 to 44 and a third of workers age 45 to 55 and over.
What is a very rough estimate of what you need? Well obviously factors like a pension, social security payments, age at retirement, home ownership, health insurance, marital status… make a huge difference in the total amount needed. But something in the neighborhood of 10-25 times your desired retirement income is in the ballpark of what most experts recommend. So if you want $50,000 in income you need $500,000 - $1,250,000. Obviously that is difficult to save over a short period of time. The key to retirement saving is consistent, long term commitment to saving.
Related: Saving for Retirement - Start Young with 401k and Roth IRA - Retirement Delayed: Working Longer
Comments
6 Comments so far
[...] part of the reason this seems likely to me is people just don’t save what they need to in order to retire - so many need to keep working (as companies will need experienced [...]
[...] are not exactly earth shattering recommendation but so many people fail to take even the most basic steps to assure a economically viable retirement the simple advice needs to be re-enforced. No one piece of advice can assure success but by [...]
[...] money to your Roth Individual Retirement Account for this year yet - go ahead and do so now. Given the state of retirement planning for the vast majority of those in the USA there is a good chance your retirement is the area of your financial life that will most benefit [...]
Don’t worry too much about exactly how your money is allocated at first. The important thing is to start saving for your retirement. After 5 or 10 years then you can take more care with the allocation of your investments…
I find this subject to very factual. The scariest thing is, most of these people truly don’t know what they are invested in with their retirement plan or what is even available out there. Where we fall short is the lack of understanding the various types of investments and what we can/or need to do in order to insure we retire without taken a step back in our living style. People need to get educated any they can to accomplish this.
The most important thing is to start saving early and don’t stop and don’t withdraw any early. If you can’t afford to put in as much as you should then put in what you can, and increase it as soon as you can…