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When it comes to saving for retirement, one thing’s for certain: American workers still have plenty of room for improvement. That’s according to the 21st annual Retirement Confidence Survey, conducted in 2011 by the Employee Benefits Research Institute (EBRI) and Mathew Greenwald & Associates, Inc. Here are a few of the survey’s most striking results on our lack of retirement readiness.
1. More than half (56 percent) of all workers have less than $25,000 in savings and investments.
That’s not much, even when you consider that number excludes the value of their primary residence and any pension plans they may have. Recognizing that, on average, people live 20 years in retirement, you can see how quickly a retiree could spend through that small amount of savings.
2. About a third (31 percent) thinks they’ll need less than $250,000 to afford a comfortable retirement.
The truth is, they’ll probably need more than that—much more. Unfortunately, those who estimate lowest are often the least likely to have done the calculations necessary to determine an accurate number, like estimating how long they may live, what their living expenses might be, and how they might pay for such things as increased medical and healthcare costs. Start thinking about those things now!
3. Almost half (45 percent) are not too confident or not at all confident that they and their spouse will be able to save as much as they think they need.
In fact, this survey finds worker confidence in having enough money to retire comfortably continues to decline, with 70 percent admitting they are a little or a lot behind schedule in planning and saving for retirement. That said, saving even a little is better than nothing—start putting away as much as you’re able, and do it regularly.
4. One in five (21 percent) is offered a workplace retirement plan but does not participate.
Despite all this uncertainty, many workers are presented with a great opportunity to save for retirement in the form of a 401(k) plan or other employer-sponsored workplace savings plan, but don’t take advantage of it. Often, these plans provide a tax-deferred way to save, and even provide a company match—and yet many workers leave that “free money” on the table. Find out how to enroll today.
If you don’t have access to a 401(k), open a Millbury Savings Bank IRA.Our IRAs have no set-up, annual, or custodial fees, and they accept rollovers and transfers from other IRAs and 401(k)s, too!