It comes as no surprise to learn that millions of Americans are trying to put money away for retirement, with varying degrees of success. Unfortunately, the number of people who fall behind is staggeringly high, putting millions at risk of not enjoying their retirement years.
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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 saved $500,000 or more for retirement.
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According to the Employee Benefit Research Institute, more than 50% of Americans have less than $10,000 saved for retirement. That’s a big concern, especially given how shockingly small a number have put away more than $500,000 for retirement.
When you look at the data breakdown provided by the research, there is no question that it surprises people of all income and savings levels. According to the study, it found that the following amounts are currently in Americans’ 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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$500,000 to $999,999: 4%
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$1 million to $4.99 million: 3.1%
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$5 million or more: 0.1%
Given these numbers, you need to consider how you can increase your retirement savings.
When the time comes, you should sit down with your spouse or financial advisor and consider how much you can save immediately. This includes your current income level, expenses, lifestyle choices, etc.
By knowing your financial situation, you can consider saving as much as possible without completely sacrificing your quality of life. This could include creating a new budget focused on reducing discretionary spending that could be put into savings instead.
As you look at what kind of financial injection you need to move from one savings level to another, you should consider what number you actually need. As a general rule, you want to set aside about 70-80% of your pre-retirement income for each year you think you won’t be working. This means establishing a baseline where you put 10%, 20%, or 30% annually into a retirement account.
This is an insignificant amount of money, which goes back to creating a new budget and where you can cut unnecessary expenses. You should try setting up savings benchmarks for different ages to see how you’re progressing. In other words, turning 30 means you want to set aside X dollars. When you turn 40, you want to set aside Y dollars, and so on.
