If you are close to retirement or have recently retired, you may have asked yourself, “Do I have enough money saved up?” This is a frequent worry which is understandable. Retirement plans involve a lot of speculation and uncertainty, which can make one anxious about whether they have enough money to last throughout their retirement years. If you’re experiencing some of this uncertainty, you should be prepared for unexpected expenses such as medical bills, long-term care, house repairs, and so on. How can you plan for these costs during retirement?
To gain a better understanding of how much people typically have saved, here is the average retirement savings of Americans by age group:
- Less than 25 years old: $6,264
- 25-34 years old: $37,211
- 35-44 years old: $97,020
- 45-54 years old: $179,200
- 55-64 years old: $256,244
- 65+ years old: $279,997 [1]
The “average” circumstances may not apply to everyone though. Each person’s retirement objectives, economic position, and deadlines differ significantly, and this could mean that you have picked out varying revenue and investment items and tackled planning for your retirement in a different way than other people.
Even millionaires who are close to their retirement have been anxious lately due to a year of discouraging stock market results and a high rate of inflation.[2] To put it in perspective, suppose someone has 1 million dollars in their retirement accounts. As per generic advice, they would take out 4 percent of their 1 million dollars in the first year of retirement.[3] This means they would be receiving $40,000 for that year. Maybe a few years ago, $40,000 would have seemed like enough to cover expenses, especially when adding social security to the mix, but with a stock market decline in 2022 decreasing that initial $1 million, plus the cost of goods and services increasing with inflation, $40,000 may not carry the same weight it did only a few years ago.
But what if you’re not a millionaire and happen to fall closer to the average? If we take the average retirement savings account holdings at the retirement age of 65, according to the data sourced, you may have roughly $280k; 4 percent of that amount would be approximately $11,200 a year, barely enough to be considered a supplemental bump.
It is essential to think about your retirement budget and the amount you plan on spending during this period. You may need to modify some of your lifestyle choices to accommodate the reduced income.
If you feel uncertain about the amount of money you have saved for retirement, contact us and we will discuss ideas and solutions that will work for your precise situation.
Advisory services are offered through Asset Strategy Advisors, LLC (ASA). Securities are offered through representatives licensed with either Concorde Investment Services, LLC (CIS), member FINRA/SIPC, or RCX Capital Group, LLC (RCX), member FINRA. Insurance is offered through Asset Strategy Financial Group, Inc. (ASFG). ASFG and ASA are independent of CIS and RCX.
Because investor situations and objectives vary this information is not intended to indicate suitability for any individual investor.
This is for informational purposes only, does not represent legal or tax advice does not indicate suitability for any particular investor, and does not constitute an offer to purchase or sell investments. Please consult the appropriate professional regarding your individual circumstance.
Content regarding social security is not associated with or endorsed by the Social Security Administration or any other government agency.
There are retirement account risks that could diminish investor returns, such as, but not limited to: low interest rates, market volatility, withdrawal timing and sequence of returns risk, government policy uncertainty and increased longevity. Prospective investors should perform their own due diligence carefully and review the “Risk Factors” section of any prospectus, private placement memorandum or offering circular before considering any investment.