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
