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October 26, 2005
2005 Retirement Confidence Survey
How many Americans save? How much have they saved? What are their savings goals? EBRI (Employee Benefit Research Institute) has the answers in the 15th Retirement Confidence Survey. Here is what they found:
Americans' top three savings goals are retirement (69%), children's or grandchildren's education (20%) and a home purchase or renovation (11%). Only 62% of workers say they are currently saving for retirement. 69% say they or their spouse have saved at one time or another.
More than half of all workers report having saved less than $25,000 for retirement. Among workers 55+, only 19% report saving more than $250K! So, just to state the obvious - among workers 55 and over, 80% have saved less than $200K. 39% of them have saved less than $25K! Wow! Can you say impending crisis?!?
Only one-third of all workers think they need to accumulate at least $500,000 by the time they retire to live comfortably in retirement. Two in 10 think they will need between $250,000 and $499,999, and one-third think they need to save less than $250,000 for a comfortable retirement.
Even using the ridiculously conservative rule of thumb of 10X your pre-retirement income, someone with a household income of $50K a year would need more than $500K in retirement savings! Using the generally accepted maximum sustainable rate of withdrawal of 4%, a household with $1 million in savings could only withdraw $40,000 a year! Can you say massive education initiative needed?!?
SOURCES:
1. Employee Benefits Research Institute and Matthew Greenwald & Associates, Inc. "2005 Retirement Confidence Survey Fact Sheet" October, 2005.
http://www.ebri.org/pdf/surveys/rcs/2005/RCS05.FS.No2.SavInAm.Final.24Mar.pdf
The full 2005 Retirement Confidence Survey appeared in the April 2005 EBRI Issue Brief and is available at www.ebri.org/pdf/briefspdf/0405ib.pdf.
Kim Snider, Kim Snider Financial Communications, Chronim Investments and/or Snider Advisors make no representation that the information and opinions expressed are accurate, complete or current. The opinions expressed should not be construed as financial, legal, tax, or other advice and are provided for informational purposes only. Call 866-952-0100 to request the Snider Investment Method™ Owner's Manual, which includes a description of the Snider Investment Method, investment objectives, risks, suitability and other information. Please read and consider carefully before investing. All investments are subject to risk including possible loss of principal.
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Kim Snider is an author, speaker and host of Financial Success Coaching, Saturdays at noon, on KRLD Newsradio 1080, Dallas - Fort Worth. This blog is primarily devoted to empowering individual investors with information to help them be good stewards of their money. Above all, it is about achieving true financial success. Kim's book, How To Be the Family CFO: Four Simple Steps to Put Your Financial House in Order is in bookstores now. Order yours from Amazon or other fine booksellers today.
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