Average Retirement Savings
Although Each Situation is Unique, Understanding an Average Can Provide Perspective
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What Does This Mean?
Lets look at those baby boomers who have stashed away $88,000 for retirement. Now lets assume that they retire at age 65 and that they live to age 84. That means theyll have 19 years in which to enjoy the $88,000 theyve set aside. How useful is $88,000 over 19 years? Lets see they can spend a whopping $4,632 a year, or about $89 a week if they want their cash to last all the way to their 84th birthday.Even if they manage to save $100,000 that still averages out to just $5,263 a year when stretched to 19 years. Thats just over $100 a week in spendable cash.
Living In DenialWhat makes all of this worse is that in a survey conducted by Allstate Insurance in 2006 more than 60% of respondents said they were saving enough or more than enough for their retirement. Clearly many of those people havent a clue.What Can You Do?Make a plan. Consult with an investment adviser who specializes in retirement savings and create a workable roadmap for reaching some sort of realistic retirement goal. And whatever you do, start today. Dont wait until tomorrow. Every day that you can compound the return on your retirement investments can mean several more dollars in your nest egg down the road.Doing nothing, sticking your head in the sand and hoping that somehow everything will work out all right is a certain recipe for financial disaster.
How Much Retirement Income Do You Need?Every person is unique and each persons financial situation and cash needs are different, so there is no one-size-fits-all answer to the question of how much you need to sock away for your retirement. However, most retirement experts believe that the average person needs approximately $50,000 a year in savings to maintain their lifestyle during retirement. Assuming that you will live approximately 19 years after retirement, $50,000 a year comes out to $950,000, a far cry from the $88,000 that most baby boomers will manage to set aside.The discrepancy $88,000 vs. $950,00 is one reason it is vital for most workers to seek the advice of a professional when it comes to setting up and maintaining a retirement account. The difference between the paltry returns from most money-market accounts and the returns possible from a stock portfolio heavy in dividend-paying stocks can make a difference of several hundreds of thousands of dollars when it comes time to end the daily commute to the office for good.So set up a plan and start saving for your retirement today not tomorrow.
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