It’s no surprise that millions of Americans are trying to save for retirement, with varying degrees of success. Unfortunately, an alarming number of people are falling behind, putting millions of people at risk of not being able to enjoy their retirement.
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58.4% of Americans have less than $10,000 saved for retirement.
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Only 7.2% of Americans have $500,000 or more saved for retirement.
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If you’re thinking about retirement or know someone who is, three simple questions are making many Americans realize they can retire earlier than expected. Take 5 minutes to learn more here
According to the Employee Benefit Research Institute, more than 50% of Americans have less than $10,000 saved for retirement. That’s a big deal, especially considering how shockingly few people have saved more than $500,000 for retirement.
When you look at the breakdown of data provided by the study, there’s no doubt it will shock people of all income and savings levels. According to the study, American currently has the following amounts in its retirement accounts:
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$0 to $9,999: 58.4%
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$10,000 to $99,999: 20.5%
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$100,000 to $499,999: 13.9%
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US$500,000 to US$999,999: 4%
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US$1 million to US$4.99 million: 3.1%
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$5 million or more: 0.1%
With these numbers in mind, it’s worth considering how to increase your retirement savings.
When the time comes, you should sit down with your spouse or financial advisor and consider how much money you can save immediately. This includes your current income level, expenses, lifestyle choices, etc.
Once you understand your financial situation, you can consider maximizing your savings without completely sacrificing your quality of life. This may include creating a new budget that focuses on reducing discretionary spending that can instead be used for savings.
When you think about what kind of infusion of money you’ll need to take you from one level of savings to the next, you have to think about the numbers you really need. As a general rule of thumb, you need to save around 70-80% of your pre-retirement income for each year you don’t consider working. This might mean establishing a baseline of putting 10%, 20% or even 30% of your net income into a retirement account each year.
Understandably, this is a lot of money, and it goes back to creating a new budget and considering where unnecessary spending can be cut. You should try setting savings benchmarks for different ages so you can see how you’re progressing. In other words, turning 30 means you need to save X dollars. When you reach age 40, you want to set aside Y dollars, and so on.
