In this post, I’m going to share with you the ugly truth about retirement that most Americans don’t want to face. Most people think they will retire comfortably, but most Americans can never retire. I’m going to share with you why that is and what you can do to change it. So sit down, buckle up, and get ready for the truth.
According to a recent poll, less than one in four people think they’ll be able to save $1.1 million by the time they retire.
According to the 2022 Schroders US Retirement Survey, only 22% of those approaching retirement age said they would have enough money to maintain a decent standard of living, down from 26% in the previous year. The survey was conducted in mid-February, when the S&P 500 Index was higher than it is now.
According to a recent poll, most Americans (56%) feel that they will not have enough money saved for retirement. Including 36% who expect to have less than $250,000 by the time they retire, 56% of respondents anticipate having less than $500,000 in assets at age 65.
The top worry among American employees about retirement was that inflation would reduce the value of their assets. The second-most-dreaded event, at least right now, has undoubtedly come to pass — over three-quarters of those polled were afraid of “a significant market declines significantly lowering assets.”
“The list of concerns that retirees have, and that Americans have, is longer and more serious today,” according to Joel Schiffman, head of defined contribution products in North America for Schroders. “Inflation, the stock market, health care costs — there’s this compounding effect.”
For some perspective, the median retirement savings for all working-age households is $3,000, according to the Federal Reserve’s 2016 Survey of Consumer Finances. For near-retirement households (ages 55 to 64), it’s $12,000.
The median 401 (k) balance is just $18,433, and the median IRA balance is $12,677, according to a report by Vanguard.
You might think that you’re doing just fine because you have a 401(k) or an IRA. But most Americans don’t have nearly enough saved in their retirement accounts to maintain their standard of living in retirement.
According to the Employee Benefit Research Institute, the median 401(k) balance for workers in their 60s is $120,000. For workers in their 50s, it’s $59,000. And for workers in their 40s, it’s just $22,000.
The typical American family has less than $1,000 saved for retirement, according to a report from the Economic Policy Institute.
Most Americans are woefully unprepared for retirement.
So what can you do to change this?
There are a few things you can do to make sure you’re on track for a comfortable retirement.
First, make sure you’re saving as much as you can. If your employer offers a 401(k) match, make sure you’re contributing enough to get the full match.
Second, invest your money wisely. Don’t just put it in a savings account where it will lose value to inflation. Invest in a diversified mix of stocks, bonds, and other assets that will grow.
Finally, make sure you have a plan. Know how much money you’ll need to retire comfortably and make a plan to get there.
The bottom line is that most Americans can never retire comfortably. But if you take steps to save as much as possible and invest wisely, you can make sure you’re one of the few who do.
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