Experts estimate that you will need 70% of your pre-retirement income to maintain your standard of living.
Do you expect your standard of living to be 30% less expensive than your current standard?
According to the US Dept. of Labor, fewer than half of Americans have calculated how much they need to save for retirement. Yet, the average American will spend 20 years in retirement.
Also consider that you could be physically unable to work earlier than your current planned date of retirement.
In This Episode, We Look At:
Planning your future source of income
More than 21 million American workers expect to rely on Social Security in retirement. Unfortunately, 56% admit to not having a good understanding of social security benefits.
Many who reach retirement age will continue to work, utilizing their years of experience and wisdom in a capacity that they may enjoy more than having to work for someone else.
Who is saving for Retirement?
76% of Americans are living paycheck to paycheck. The majority cannot handle a $500 unexpected expense.
29% of workers say they have less than $1,000 saved for retirement.
56% of workers say the total value of their investments is less than $25,000.
Source: Employee Benefits Research Institute, Retirement Confidence Survey, 2010c
Why are we in this position?
We have the “I’ll catch up later!” mindset. We might try to catch up later, but it gets harder the longer you put it off.
In many cases you cannot make up for lost time without having to invest a much greater dollar amount every month.
You can plan for your future with minimal pain
It’s amazing what you can accumulate with a modest monthly contribution over the course of years.
A twenty-year-old who invests $100 per month in equities may accumulate over $1 million by age 65. (hypothetical calculated at 10.5% average annual return)
Someone who waits until they’re 30 to invest $150 per month until age 65 may still accumulate over $400,000. (hypothetical calculated at 9% annual return)
One Thing You Can Do Today to Improve Your Faith and Finances:
Commit to invest an amount every month for as long as you are employed. Increase that monthly investment as your pay increases and as you pay off certain bills—like credit cards and car loans.
What Are Your Thoughts?
If you have a question or comment about today’s topic, we invite you to share your thoughts.