It’s likely when you do a retirement calculation, you’ll see a big number. And you may find you’re not on track to hit it.
“We know people get frightened when they see the gap,” said Mathew Greenwald of Greenwald & Associates, which conducted and co-sponsored the retirement survey.
But as scared or discouraged as people get, once they know their number they can set more realistic targets, VanDerhei said.
“Many people can make better decisions and have more control when they know,” Greenwald said.
Look at these numbers from the survey:
— 57 percent of workers reported that they had financial assets totaling less than $25,000, not including their primary residence.
— Only 23 percent of retirees feel very confident that they had done a good job of preparing for retirement.
— 16 percent of workers and 13 percent of retirees said their level of debt is a major problem.
— Only 50 percent of workers and 52 percent of retirees indicated that they could definitely come up with $2,000 if an unexpected need arose within the next month.
Perhaps you’re thinking your number might not need to be so large because you’ll just work longer. In 1991, 19 percent of workers planned to retire before age 60 and another 31 percent between the ages of 60 and 64. But now, only 9 percent plan to retire before age 60, and only 14 percent plan to retire in the 60-64 range.
But what if you can’t work?
Almost half of retirees had to retire before they expected, according to EBRI. “The survey results contain a lesson for workers: Do not put off too much saving,” Greenwald said. “Plan to save at least a foundational amount by age 60. The risk of waiting beyond that to build a foundation is too high.”
An important part of the retirement planning process is figuring out how much annual income you need to retire comfortably. And this means you need to know your number.
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