Even Americans with only modest retirement funds may be shocked to learn how many people are in desperate need: as in, they have no nest egg at all.
New research from the Federal Reserve shows that an astonishing one in four Americans (including the 27% who consider themselves retired) have absolutely nothing saved.
And even if you have something tucked away, it might not be enough – even if it’s something you can change even late in the game.
Americans are running an estimated $3.68 trillion behind in retirement savings, according to the Employee Benefit Research Institute. Although this includes all people aged 35 to 64, those in their 60s were still not doing so well.
Here’s how your savings stack up – and what you can do if you fall behind.
Don’t miss out
What is the average?
A Vanguard study found that those between 55 and 64 had an average of about $256,000. But this includes high income earners; breaking the numbers down, it shrinks to a median of about $90,000.
Interestingly, much has changed even in the short time since 2021, the source of the numbers for Vanguard’s study. Last year, Vanguard noted that retirement savings actually increased, thanks to strong stock market performance.
But of course, since then, Wall Street’s woes have persisted for much of this year, as even otherwise strong stocks have been punished.
Which means the 2023 numbers could drop significantly – but at dollar cost averaging, people who persevere and continue to invest will be rewarded if the market returns to full strength.
Is there a magic pension number?
So how much should do you have it when you are 60?
Pension calculators like this one can help you get some answers. But the best thing Americans can do is go to a financial advisor who can help them achieve their goals.
If you want a broader approach, Fidelity has ways to find the right numbers for you. Broadly speaking, Americans should aim for equivalent wages within 30 years, three times by 40, six times by 50 and eight times by 60.
Read more: ‘Remarkable reversal’: President Biden just (quietly) reduced student loan forgiveness — and the change could affect up to 1.5 million borrowers. Are you one of them?
So, if you’re 60 American and make $50,000 per year, that means you should have $400,000 saved in your retirement account. As you can see, neither average nor The median pension amount is even closer.
That said, the “should” amount does not account for a number of variables. Consider, for example, how much you will be able to cut expenses in retirement, the money you can take in through social security, assets you can offload or selling a home.
How can you balance the numbers?
First and foremost, talk to a financial advisor. If you don’t have one, talk to friends who have done well with their counselor or seek referrals from someone you trust.
The adviser must consider your entire financial picture. Do you have children you need to support when it comes to education or weddings? What is the value of your home and are you planning to move? What asset sources have you possibly overlooked?
Remember, it’s never too late to start saving money. Even 5% of each paycheck adds an extra $96 every two weeks, or $2,500 at the end of the year, which can then add up.
And that’s far better than the zero mark that applies to 25% of Americans: all of whom deserve better than to retire their savings before they start.
What to read next
‘The world should be worried’: Saudi Aramco – the world’s biggest oil producer – just issued a dire warning about ‘extremely low’ capacity. Here are 3 stocks for protection
‘This truck can’t do normal trucking things’: YouTube star says towing Ford’s new electric pickup is a ‘total disaster’ in viral video – but Wall Street still likes these 3 EV stocks
‘I just can’t wait to get out’: Almost three-quarters of pandemic homebuyers have regrets – here’s what you need to know before you make that offer
This article provides information only and should not be construed as advice. It is supplied without warranty of any kind.