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Average retirement savings

Average retirement savings in the U.S are pitifully low and if you fall in the same ballpark you need to do something about that as fast as you can.

Finding up-to-date figures proves impossible but the most recent available numbers indicate the following:

  • Those younger that 35 average $6,306
  • 35-44, $22,460
  • 45-54, $43,797
  • 55-64, $69,125
  • 65-77, $56,212

If you plan to sit at home and read, you don't have unusual medical expenses and you don't expect to travel or do any of the things many working people dream of when they retire…well, you probably won't starve if you have $69,125 at age 65. It all depends on how long you live.

Before you breathe easy, get the answer to this question: How much, making reasonable assumptions, do you expect to receive from Social Security? Of course, the 2010 Retirement Confidence Survey from the Employee Benefit Research Institute found 70% of workers were not confident that benefits at least equal to today's benefits will continue.

Next, add $5,000 a year (that's $417 a month) to this figure. Could you live on that if you had to? Would the quality of life be acceptable?

Age

Capital

Gain 5%

Total

Balance

 

 

 

 

 

65

69,125

3,456

72,581

67,581

66

67,581

3,379

70,960

65,960

67

65,960

3,298

69,258

64,258

68

64,258

3,213

67,471

62,471

69

62,471

3,124

65,595

60,595

70

60,595

3,030

63,625

58,625

71

58,625

2,931

61,556

56,556

72

56,556

2,828

59,384

54,384

73

54,384

2,719

57,103

52,103

74

52,103

2,605

54,708

49,708

75

49,708

2,485

52,193

47,193

76

47,193

2,360

49,553

44,553

77

44,553

2,228

46,781

41,781

78

41,781

2,089

43,870

38,870

79

38,870

1,943

40,813

35,813

80

35,813

1,791

37,604

32,604

81

32,604

1,630

34,234

29,234

82

29,234

1,462

30,696

25,696

83

25,696

1,285

26,980

21,980

84

21,980

1,099

23,079

18,079

85

18,079

904

18,983

13,983

86

13,983

699

14,683

9,683

87

9,683

484

10,167

5,167

88

5,167

258

5,425

425

89

425

21

446

-4,554

90

-4,554

 

 

 

If you could you'd better not live beyond the moment you blow out the candles on your 89th birthday cake…assuming your budget runs to cake.

Think that's all the bad news about low average retirement savings? Think again! I did not take into account inflation which in the past 80 years has averaged 3%. Subtract that from your 5% income and you're left with a gain of just 2%.

But wait a minute! In retirement when you already know money is scarce you probably are not going to get 5% on your savings either. You will probably be afraid of losing what little you have…and you should be.

Since 1938, just before The Great Depression, Federal Reserve Board figures show Treasury Bills have averaged 3.8%. Deduct average 3% inflation from that and you're in a whole lot more trouble.

And we're not through with the bad news yet! Are you one of the minority who think Social Security will be there for you as a safety net?

As the number of Boomers entering retirement continues to swell, those Americans left in the workforce will be insufficient to finance retirement benefits.

High government debt won't allow it to help either.

The point of this scary article is to prove that you have a choice: a little discomfort now because of an increased savings program or a whole lot of trouble later in life when there's nothing you can do about it.

We all need to get our savings considerably above the national average retirement savings level.

And we need to learn the best way to increase the earnings on our savings; earnings over time are even more important than the actual amount of money saved.

Return from Saving Enough for Retirement to Savings for Retirement

 



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