Retirement savings… that thing you are supposed to live off of when you no longer want to work. Although people seem to talk about it frequently, most people do not realize how important it is to actually save for retirement. In fact, there are numerous statistics that show how little people save for it. For instance, 40% of working Americans are currently not saving for retirement at all. And on top of that, 80% of Americans ages 30-54 believe that they will not have enough saved for retirement.
So, how come Americans do not save for or are not confident about retirement? For starters, many believe that saving for retirement is not worth it because they can just rely on Social Security. However, what most people do not realize is that Social Security was meant to supplement retirement, not completely fulfill 100% of a retiree’s needs. And, if you fall into a higher income bracket, Social Security will only cover a small fraction of your income. Another reason people fail to save for retirement is because many families live above their means, meaning that they typically spend more money than they make. This also explains why many people lack sufficient emergency funds.
So, are you on track when it comes to retirement savings? First, do you know how much you need save to support 70-85% of your current income in retirement? If you do not, J.P Morgan offers a Retirement Savings Check Point. If you are surprised as to how much you need to have saved, consult with a Financial Advisor, such as Castle Rock Investment Company, to discuss what is an appropriate savings rate for you and how to get there!
Although the idea of saving for retirement can be quite intimidating, the need to have sufficient savings is becoming more and more crucial as the cost of living and reaching important goals are increasing every year.