Most Americans Have Unrealistic Retirement Plans and Insufficient Budgets
Two different studies came out today that indicate Americans aren’t properly preparing for their future.
The first is a report from Natixis Investment Managers, which shows three in four Americans think they can live comfortably off their retirement income, but they are not putting enough away to achieve that lifestyle.
For example, the average Baby Boomer only has 30% saved of the $1 million necessary to live comfortably in retirement. In order for a 64 year-old to retire by 69, he or she would need to put away $142,000 a year. Millennials have started saving earlier than older generations, but they also plan to retire earlier at age 61. To stay on track with that, most would need to boost their retirement contributions by 19% each year.
A separate survey from Debt.com shows 67% of Americans have their families on a budget. This is down slightly from 70% last year, and shows that one in three Americans aren’t actively managing their money.
The most budget-savvy age group was adults 23 to 38 years of age, with 74% saying they follow a budget to control debt and plan for retirement. By comparison, 67% of adults over 39 said they use a budget.
In order to adequately plan for retirement, it is important to assess your current income and expenses. Create a plan to realistically save for retirement, including debt repayment and dependable investment options. Talk to your employer about your retirement savings options, and work with a financial advisor to build your retirement portfolio.