Americans Are Too Behind on Retirement Savings to Even Try

Only 10% of people think they will have enough to retire, according to a survey by Northwestern Mutual, and 15% of Americans have no retirement savings at all.

Photo by Aaron Burden at Unsplash

If you’re one of the 90% that is concerned you may not have enough saved, you’re probably right.

And it’s too late to even try. 

Don’t bother trying to save more. There’s no point. You’ll be lucky to retire at all.

It’s never too late to create the life you want, and retirement may not be as far away as you think.

First of all, there’s no better time to start saving for retirement than RIGHT NOW. Whether you’re 16 or 60, it’s never too early to get started, and it’s especially  never too late.

“But I’m already 48 and I only have $63,000 saved for retirement. I’ll have to work well into my 60s, maybe even 70s.” ($63,000 is the median retirement savings for Americans in their 40s.)

Even if this is similar to your situation, it is still not too late. Here’s why…


Savings Rate vs. Years to Retirement

In one of the best financial blog posts ever, Mr. Money Mustache shares The Shockingly Simple Math Behind Early Retirement.

In short, your savings rate (savings as a percentage of your income) can tell you how long you need to work before you can retire.

For example:

  • If you saved 0% of your income, obviously you’d never retire because you’d never have any money saved.
  • If you saved 100% of your income, you could retire right now.

The latter is clearly unrealistic because it implies you spend $0. However, the end points of this spectrum help you get a grasp on what we’re dealing with. All other possibilities lie within this range. Here’s the breakdown:

What does this mean for you?
  • Maybe the example used above for a 48-year-old is similar to your situation. Saving 50% of your income means you can still easily and comfortably retire at 65. It’s not too late. Start NOW.
  • Maybe you’re in your 20s or 30s. You could easily retire around 50 by saving 30-40% of your income. It also show how you might be able to retire way earlier.
    • I hope this math motivates you the same way it motivated me. (I was already a pretty frugal person, saving about 60% of my income. After seeing this, I bumped that up even more!)
  • Or maybe you’re older, say, 55. You too can retire at 65 by saving a little more than 65% of your income. Again, it’s not too late. Start NOW.

Breaking the Cycle

It’s easy to be hard on yourself and think, “Well, it’s too late now. It doesn’t matter. I won’t have enough saved for retirement.”

If this is what you tell yourself, it will be true

Every day you have a choice: keep doing what you’ve been doing, or to create the life you want and live with Financial Liberty. I hope seeing how this math works out has motivated you to try something new.


Don’t Know Where to Start?

If you’re ready to get started, but not sure how to go about doing so, here’s some suggestions:

  • One of the best tools for saving for retirement are accounts that give you tax advantages, specifically 401(k)s and IRAs.
  • Not sure where to invest the money in your 401(k) or IRA? In a few minutes, you can learn about asset allocation and have a computer do it all for you.

Still have other questions, no problem! It shouldn’t be so taboo to talk about finance. Ask a friend or family member. Or, of course, you can always ask me! Put your questions in the comments below!

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