One of the most important things you can do is to save enough for retirement. Unfortunately, many Americans aren’t saving anything for their future.
According to a recent survey from GoBankingRates.com, it looks as though about one in three Americans has absolutely nothing in their nest egg. This is a concerning number since it indicates that many people aren’t preparing for their financial future.
Here are the results of the survey, indicating how much money the respondents say they have saved for retirement:
- Less than $10K—23%
- $10K to $49K—10%
- $50K to $99K—8%
- $100K to $199K—8%
- $200K to $299K—5%
- $300K or more—13%
- I don’t have retirement savings—33%
If you look at those numbers it is clear there is a long way to go for many Americans hoping to retire. On top of that, the problem is compounded for women. According to the survey, women are 27% more likely than men to have no retirement savings. Part of the reason for the shortfall is likely due to the fact that many women are still the caregivers in our society, and may not have their own retirement assets.
While the idea that your partner can take care of you in retirement is a nice one, I know from experience that your partner doesn’t always stick around. At the very least, it makes sense for a stay-at-home partner to ask for spousal contributions to an IRA.
Are You Saving Enough for Retirement?
There is a good chance that you probably aren’t saving enough even if you are saving for retirement right now. Take some time to use a retirement calculator to figure out how much you might need in retirement, and then break down how much you need to say each month to increase the chances of reaching your goal.
David’s Note: Using a calculator can actually be very motivating. I get excited every time I use a projection of my savings and see that I’m that much closer to financial independence. You have to be patient, as savings take time to compound but once money starts growing, then you’ll reap the benefits forever.
In the past, research indicated that many Americans don’t even perform a retirement needs assessment. You won’t be able to tell if you’re saving enough for retirement if you don’t even know how much you need. Unless you are quite young, The reality is that saving something like $200 dollars a month is probably not enough to fund your retirement.
After you decide how much you will need for retirement, and after you realistically look at whether or not you are saving enough, it is time to make adjustments to how much you set aside each month. Look for ways to cut the fat from your budget and put that money toward your financial future by investing more in your retirement account. Whenever you get a raise, make sure to increase your retirement account contributions. And, of course, don’t forget to see if your employer offers matching contributions. That’s free money you can use it to build a more stable financial future.
Editor's Note: I've begun tracking my assets through Personal Capital. I'm only using the free service so far and I no longer have to log into all the different accounts just to pull the numbers. And with a single screen showing all my assets, it's much easier to figure out when I need to rebalance or where I stand on the path to financial independence.
They developed this pretty nifty 401K Fee Analyzer that will show you whether you are paying too much in fees, as well as an Investment Checkup tool to help determine whether your asset allocation fits your risk profile. The platform literally takes a few minutes to sign up and it's free to use by following this link here. For those trying to build wealth, Personal Capital is worth a look.