How Much Do You Think You Need to Retire?
A survey recently conducted by Bankrate.com indicated that those who have made an estimate, put the median amount at $650,000.
Lee Barney of PlanSponsor.com reported on this survey in early June, quoting the following numbers:
- 61% of those Americans surveyed don’t have any idea of how much they will need to retire successfully.
- $650,000 was the median guess for participants who have done some assessment.
- 19 million people indicated they will never retire
- This includes 9% of Millennials (18-37 year-olds) and Baby Boomers (54-72 year-olds)
- 69% of Millennials are the least sure of their money needs
It doesn’t get much better with older Americans who also don’t seem to have a clue:
- 56% of Generation X (38-53 year-olds),
- 58% of Baby Boomers, and
- 59% of those ages 73 and up.
On the other hand, people who have given some thought to required retirement savings, are all over the spreadsheet:
- 7% believe between $250,000 and $500,000,
- 8% think $250,000 or less,
- 8% believe $500,000 to $1 million,
- 8% say more than $1 million:
- Gen Xers are twice as likely as the other age groups in thinking they will need this amount to retire.
- Employed individuals are three times more likely to say this compared with the unemployed.
- Where people live also affects their assessment:
- Northeasterners (12%) and Westerners (11%) say $1 million or more
- Midwesterners (5%) or Southerners (6%) think that’s the case.
According to bankrate.com analyst Taylor Tepper, “The key to retirement savings is to… save for retirement… Put away at least 10% of your pay, including any employer contributions, into your retirement account – and do it yesterday. There are pretty sophisticated online calculators and tools that can help you estimate how much you’re going to need, and you can always hire a fee-only certified financial planner if you want a little more hand-holding.”
Over half of Americans indicated they have sought advice on retirement planning:
- 26% consulted personal financial advisers,
- Boomers (37%) tend to be the ones working with advisors.
- 21% asked a family member or friend,
- Millennials (30%) are most likely to reach out to a family member or friend.
- 11% used an online retirement calculator,
- 10% contacted banks or financial institutions,
- People who are married or living with a partner are twice as likely to consult a personal financial adviser or financial institution that those who are single or living alone.
- 8% trusted expert commentaries or articles,
- Under 1% used robo-adviser.
“Social Security will almost certainly contribute a sizable portion of your retirement income, even for Millennials, despite erroneous declarations that the pension program will soon go bankrupt,” said Taylor Tepper. When asked how much of their retirement would be funded by Social Security, the 1,000 adults surveyed said:
- Little to none: 61%,
- Half: 20%
- Most of their income would be from Social Security: 17%
The survey was conducted by GfK Custom Research North America for Bankrate.com in May.