17 July 2019

Million Bucks More on Retirement Savings

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The majority of Generation X workers believe they'll need to save a million bucks or more for retirement, and almost a third think they'll need more than $2 million. But so far they only have about $70,000 in retirement savings for their household, according to a report out Thursday from the non-profit Transamerica Center for Retirement Studies.

Most (83%) Gen Xers — those born between 1965 and 1978 — are concerned that Social Security won't be there when they're ready to retire, and the majority (85%) think they'll have a much harder time achieving financial security than their parents did, says the report, which is based on a survey of 4,143 full-time and part-time workers, including 1,120 Generation Xers.

Only 14% are very confident they'll be able to retire one day with a comfortable lifestyle, and about a third expect a lower standard of living in retirement.

It is never too late to start saving for retirement — or to begin saving even more. About 84% of Gen Xers who are offered a 401(k) or similar plan participate in the plan at a median annual contribution rate of 7% of their annual salary.

Other findings about Gen X workers: 

• 31% think they will need to save $2 million or more for retirement; 25%, $1 million to $2 million; 20%, $500,000 to $1 million; 24%, less than $500,000.

• 39% would rather not think about retirement investing until they get closer to retirement.

• 54% plan to work past age 65 or don't plan to retire. Most (62%) would like to ease into retirement by staying employed but work fewer hours so they have more leisure time, or they would like to work in a less demanding job that gives them greater personal satisfaction.

• Only 44% are working on keeping their job skills current; 18% are networking and meeting new folks; 17% are checking out the job market

• 61% have a retirement strategy, but only 14% have a written plan.

• 65% say they don't know as much as they should about retirement investing.

• 35% of those who are investing for retirement use a financial adviser.

Retirement planning tips: 

• Take a close look at your finances. Do an assessment of your retirement savings, assets and debts. Doing a smart budget now may pay off in the future, she says.

• Calculate how much money you'll need for retirement and make a plan. Write it down. Make sure you consider living expenses, health care costs, long-term care, interests and hobbies

• Save aggressively. Participate in employer-sponsored retirement plans, if offered, and take full advantage of employer contributions. Consider catch-up contributions available for people age 50 and older.

• Learn all you can about retirement investing. Consider seeing a professional financial adviser.

• Check into Social Security and other government benefits such as Medicare

Click here to access the full article on USA Today. 

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