Around half of American households have no retirement accounts at all.
No 401(k)s, no IRAs, nothing.
You might think that’s because they’re all expecting pension income in retirement. In fact, according to the Government Accountability Office (GAO), around 29% of households age 55 and older have neither retirement savings nor a pension.
It doesn’t paint a pretty picture.
What Is Average?
According to the National Institute on Retirement Security, almost 40 million households have no retirement savings at all. The Employee Benefit Research Institute estimates that Americans have a retirement savings deficit at $4.3 trillion.
That means all U.S. households (with a head of household between the ages of 25 and 64) have $4.3 trillion fewer in savings than they should have for retirement.
Research by the Federal Reserve found that the median retirement account balance in the U.S. (looking only at those who actually have retirement accounts) was just $59,000 in 2013. The mean balance was $201,300.
Those numbers might not sound bad but consider that a retired couple’s medical costs were recently estimated to be about $200,000. And that’s only medical costs.
How to Maximize Your Retirement Savings
Speak to a financial advisor about your best course of action for retirement planning. If you’ve never spoken with one, don’t stress. To make it as simple as possible, we designed a tool to match you with a financial advisor in your area.
Here's how it works:
- Take this quick survey and answer a few questions about your current financial situation.
- Our SmartAdvisor tool matches you with up to three advisors who can provide expertise based on your profile and goals. You don’t have to spend hours interviewing dozens of people and firms.
- Check out the advisor’s profiles, interview them on the phone or in person and choose who to work with in the future.
Where You Stand
Experts generally think of retirement savings as an end goal with a series of mileposts along the way. Some say you should have saved the equivalent of one year’s salary by the time you hit 30, but saving more certainly won’t hurt.
By the time you retire, it can be a good idea to have between nine and 11 times your salary in retirement savings. These aren’t hard-and-fast rules, and experts disagree about how much to save by 30, 35, 40, 45, 50, 55, 60, 65 and beyond.
Conventional wisdom has been that saving between 10% and 15% of your salary each year will get you on your way to a comfortable retirement so long as you choose a low-fee investment vehicle that consistently earns inflation-beating returns.
Talking to an expert, like a financial advisor that matches your goals, can help you set and execute a retirement plan.
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