Most people only have loose benchmarks for how they are doing in their retirement planning.
Collectively, however, it’s clear that people aren’t saving enough to reach appropriate savings goals.
A survey by the Transamerica Center for Retirement Studies showed the median retirement savings for Americans in their 50s stands at $117,000, with the median for people in their 60s pegged at $172,000.
Consider that experts want savers in their 60s to have a nest egg equal to eight to 10 times their salary; based on the median savings and backing out the math from it, that nest egg is appropriate for a 60-year-old saver earning somewhere between $17,000 and $21,500 annually.
The problem is that the actual median income for people nearing retirement age is more like $55,000, meaning Americans are woefully under-saved — like two thirds below recommended levels –and will have trouble creating financial peace in retirement.
Fidelity Investments has done extensive “savings factor” research to show the multiple of salary that investors should amass by a certain age.
For example, at age 45, an investor is considered on pace for appropriate retirement savings if they have four times their salary. At age 60 it’s six times the salary, rising to 10 times salary set aside for retirement come age 67.
