Although as a nation, we’re working harder and logging longer hours than ever before, we're saving less and relying more on credit to get what we can’t wait to have. GoBankingRates conducted a 2016 survey asking Americans how much money they’ve saved for retirement and found that most people are behind on their retirement savings. We all struggle with finding a balance of having enough for today and saving for our tomorrows. Too often, meeting the financial demands of today means delaying, diminishing or simply never starting to save for tomorrow.
Compounding interest is one of the amazing wonders of the world. A thirty year old saving just $300 per month for 30 years until age 60 earning just 4% annually could accumulate almost $210,000. Think about it, that’s only $10/day, one less latte for the morning. Saving $1,000 per month or $12,000 per year would accumulate close to $700,000 for a nest egg.*
Only 1 in 4 people Age 55 and Over Had Saved More Than $300K. As respondents get older, the gap between the savers and the save-nots widens. Although a larger portion of people age 55 and over report high-balance retirement funds, there remains a significant subgroup that has little to no retirement savings:
- About 3 in 10 of respondents age 55 and over have no retirement savings.
- 26% report retirement savings with balances of under $50,000, an amount that is insufficient for people nearing retirement age.
- Over half (54%) of people age 55 and over have balances far behind typical retirement fund benchmarks for their age group.
It’s not all bad news, however:
- After “less than $10K,” the most common balance Americans have saved for retirement is “$300K or more.”
- A significant 13% of Americans’ retirement savings balances are in the top bracket.
“The fact that so many Americans do have $300,000 or more saved for retirement goes to show just how easily the amount of money in your retirement fund can grow over time if you are dedicated to contributing regularly,” Bonner said.
There are, of course, roadblocks that stand in the way of saving for your future. One of the biggest problems is the rising cost of education: College students are loaded down with student loans even before they graduate. It’s tough to begin saving for retirement when they have more than $25,000 in student loans to repay. There is usually a long list of poor financial decisions preventing us from taking control. With our consumerism dominated society, simply spending less than one’s income is key. Some spend more for vacations than they save for retirement. And parents are going into debt spoiling their kids as they try to keep up with the Joneses.
Saving can be hard. We can help. To help start your journey to financial freedom, contact us - we’d like to hear from you.
Raymond James is not affiliated with GoBankingRates or Kristen Bonner.
*This is a hypothetical illustration and is not intended to reflect the actual performance of any particular security. Future performance
cannot be guaranteed and investment yields will fluctuate with market conditions.
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