Every few months, a flurry of news articles appears that tells the same sad tale: Americans simply aren’t saving enough to enjoy any kind of freedom in retirement. But our attention was recently drawn to this comprehensive article on the subject of retirement savings that we found on the GOBankingRates website. In the midst of another set of gloomy statistics, the article says, there’s a glimmer of good news.
“The tide might be turning when it comes to retirement savings in America,” the article states. This is now the third year in a row during which GOBankingRates has surveyed adults across the U.S. to find out how much the average person has saved for retirement, and this most recent survey shows marked improvement in the percentage of Americans with $300,000 or more in a retirement nest egg. Even more encouraging, the number of people with no retirement savings at all, or very little, appears to have declined dramatically.
The GOBankingRates survey included 1,000 respondents in each of three groups – millennials, Gen X’ers, and baby boomers. The survey asked each age group the same question: “By your best estimate, how much money do you have saved for retirement?” Respondents could select one of the following options:
- Less than $10,000
- $10,000 to $49,999
- $50,000 to $99,999
- $100,000 to $199,999
- $200,000 to $299,999
- $300,000 or more.
Overall, said the 2018 survey just released, about 42 percent of total respondents have less than $10,000 set aside for retirement, and about one in seven reported having saved absolutely nothing. At the other end of the spectrum, however, about one-quarter of respondents say they’ve saved $200,000 or more for their retirement future. When you drill down to the baby boomers, those aged 55 and older, the picture improves somewhat but millions are still lagging behind: roughly one-third have less than $10,000 saved for retirement compared with a slightly higher percentage in the $200,000-plus category, and the rest scattered in between. The Bureau of Labor Statistics has calculated that adults 65 and older spend an average of roughly $46,000 per year to live on, so it’s clear that a significant number of tomorrow’s retirees are going to find it difficult if not impossible to enjoy anything beyond a pretty basic lifestyle in the future.
To find out why so many people have set aside no money at all, GOBankingRates conducted a second survey, asking 1,000 of the “zero savers” why they had no reserves. The reasons were predictable. Among respondents 55 and older, more than 40 percent said they didn’t make enough money to afford any savings. Another 25 percent gave a related but somewhat different response, claiming all their money was going toward paying the bills. A far smaller group, fewer than one in 10, claimed they weren’t saving because they weren’t going to need the money. Our guess is that these folks may be in for a rude awakening.
So what about the “good news” mentioned earlier? According to the GOBankingRates article, as sad as it is that 42 percent of survey respondents can claim less than $10,000 in retirement savings, that number actually represents a major improvement. In 2016 and 2017 the “under-$10,000” number was about 55 percent. What’s more dramatic is the drop in the number of people with no savings at all: in 2018 it was about 14 percent of survey respondents, but last year and the year before it was closer to 33 percent. Maybe people are at least starting to get the message.
As these articles typically do, this one ends with a familiar admonition to save more, work longer and adjust your lifestyle both now and in the future to be able to live on less. This is all good advice, but we think it’s only part of the solution. As you navigate into an uncertain future, you’ll certainly need a good, solid, comprehensive financial plan, one that evaluates and allocates your current and future resources with clarity and wisdom. But there’s far more to retirement than finances. In order to be truly effective, your plan should also help you decide what type of housing will be best for you both now and in the future. It should provide you with a legal framework to protect you and your heirs, not to mention your estate. And it should include clear instructions for your loved ones since they will be intimately involved in your life as you grow older. (After all, aging is a family affair.)
Is there such a plan? There absolutely is, and it’s called a LifePlan from AgingOptions. Only an AgingOptions LifePlan weaves all these critical elements together into one seamless and well-integrated retirement blueprint to help you build the retirement of your dreams. But don’t take our word for it: find out for yourself, without obligation, at a free AgingOptions LifePlanning Seminar with Rajiv Nagaich. Do what thousands like you have done and spend a few hours learning from Rajiv. You’ll be very, very glad you did. We have several LifePlanning Seminars coming up, so click here for all the details plus online registration. Whether you’re retiring in a few years or a few decades – or are already retired – come join Rajiv Nagaich soon for one of these information-packed seminars. We’ll look forward to meeting you!
(originally reported at www.gobankingrates.com)