Freezing in NH

An article in Money today: Have less than $25K in savings? Get in line

Nearly half of all workers saving for retirement have savings that fall short of the $25,000 mark, according to the 2007 Retirement Confidence Survey by the Employee Benefit Research Institute and Matthew Greenwald & Associates.

Predictably, the youngest workers (ages 25-34) dominate this group - 68 percent of them have less than $25,000 earmarked for their later years. But so do half of workers age 35 to 44 and a third of workers age 45 to 55 and over. 

[…]

While financial pressures can play a big role in how much one saves, so, too, may your expectations: 30 percent of workers said they thought they would need to have a nest egg worth less than five times their current income to live in retirement, while 27 percent thought they needed between five and 10 times their income in savings.

All but the lowest earning men should have 12 times their income just before retirement, estimates EBRI. That’s $900,000 for a man earning $75,000. A woman, because of higher life expectancies, should have 14 times.  

Wow, it makes my paltry retirement savings look good.  These are just rules of thumb, your needs/wants may differ.  If you’re currently saving 50% of your income, (and like living that way) you only need to replace 50% of your income with social security and retirement savings when you retire.  On the other hand, if you have big plans for travel after retirement, you might spend more than you currently do for the first few years.

This entry was posted on Wednesday, April 11th, 2007 at 10:54 am and is filed under articles, retirement. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.