Are You Saving Enough for Retirement?
The Facts: According to a recent ADP study, almost 30% of pre-retirees surveyed – those over the age of 50 and actively working – said that the biggest challenge they face in preparing for retirement is determining how much they need to save.
It may be alarming to know that the study shows less than 20% of pre-retirees have over $500,000 in an employer-sponsored retirement plan, such as a 401k, since they are only 10-15 years from retirement. Even retirees are struggling with savings, with nearly 40% feeling underprepared for their retirement savings goal.
Here’s the Key: The study shows pre-retirees are simply not prepared for retirement, with the majority (52.6%) of them lacking a simple, personalized plan for retirement. As a result, over one-third of pre-retirees feel they are not on track toward or do not have a retirement savings goal.
As a Result: More than one quarter of pre-retirees expect social security to provide more than 50% of their monthly income in retirement. With the average monthly social security benefit being $1,614 in 2022(1), relying on social security as their main income source may not provide pre-retirees with enough money to live comfortably. Most retirees will need to supplement their social security with additional sources of retirement income, such as personal savings or investments.
By not having a personalized retirement plan, here are the Top 5 Financial Regrets of Those Over 50:
- Not having saved more for their retirement during their working years.
- Not buying long-term care insurance, to pay for nursing home or similar. (Note, there is a wide misperception that Medicare will pay for a nursing home and in majority of cases it won’t.)
- Not working longer.
- Claiming social security too early.
- Not investing in a lifetime annuity or similar product that would produce a guaranteed income for life.
At Century Management Financial Advisors, our goal is to help define what financial freedom means to you, aligning your goals with your resources, helping you to pursue it, and then helping you to maintain the wealth that you have achieved.
Whether you are just getting started, preparing for retirement, or well into your golden years, Century Management Financial Advisors is here to help. Please give me a call at 512-692-7313 or schedule some time on my calendar if you would like to connect and have an exploratory call.
Scott S. Van Den Berg, President, CFP®, ChFC®, AIF®
Sources: ADP Retirement Services - October 2022, Center on Budget and Policy Priorities - March 2022(1), Market Watch, Barron’s - November 2022 https://www.barrons.com/articles/retirement-savings-planning-mistakes.
This content is developed from sources believed to be providing accurate information. This information is not intended to be tax advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.