02/16/2021
19th annual survey, the Transamerica Center for Retirement Studies found that millennials had median retirement savings of approximately $23,000, compared to $64,000 for Gen Xers and $144,000 for baby boomers.10
Similar findings come from the Economic Policy Institute: It estimates that those aged 32 to 37 have saved around $31,644, but that figure rises substantially to around $67,720 for those aged 38 to 43. For those aged 44 to 49, average retirement savings are $81,347. Finally, those aged 50 to 55 have saved an average of $124,831.9 While these may seem like healthy amounts, all of these numbers are well below even the most conservative goals.
Part of the problem, according to TransAmerica, might be a lack of financial understanding and education. Sixty-eight percent of workers believe they don’t know as much about retirement as they should. In fact, 37% of workers say they don’t know anything about asset allocation and around 22% admit to not knowing how their retirement money is invested.11
For that matter, only 20% of Americans say they know "a great deal" about Social Security, even though nearly 74% expect it to be a significant source of income when they stop working.12
The Social Security Administration states that its retirement benefits are designed to replace only about 40% of the average worker's wages.13
How to Turn It Around
The sad but true part is that most Americans don’t have nearly enough savings to sustain them through retirement.
How do you avoid that fate? First, become a student of the retirement savings process. Learn how Social Security and Medicare work, and what you might expect from them in terms of savings and benefits.
Then, figure out how much you think you'll need to live comfortably after your nine-to-five days are over. Based on that, arrive at a savings goal and develop a plan to get to the sum you need by the time you need it.
Start as early as possible. Retirement may seem a long way away, but when it comes to saving for it, the days dwindle down to a precious few, and any delay costs more in the long run.
-Investopedia
