Bad News Continues for Saving Enough for Retirement

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The bad news just doesn't stop for saving enough for retirement, despite U.S. stock markets being near record highs. A research report, released by The National Institute on Retirement Security, showed the median retirement account balance dipped from $3,000 to $2,500. That's right, $2,500 isn't a misprint.

An even more depression fact is, nearly 40 million households have no retirement savings at all. Granted, current savings rates are nothing to write home about but that shouldn't be an excuse not to save for retirement.



If you're one of the 40 million that doesn't have any retirement savings you need to start right away. The old Chinese Proverb "the best time to plant a tree was 20 years ago, the second best time is now," holds true to saving as well.

The median retirement account value for those near retirement, age 55 to 64, is $14,500. The retirement account balance is higher than the overall median, but the situation is more dire if you fall into that age group. If you're near retirement, you have no time to save and invest, to try and make up for lost time.


Source: National Institute on Retirement Security

We all know we are not saving enough for retirement, but are not doing anything about it. A report released earlier this month by the NIRS showed 86 percent of Americans believe there is a retirement savings crisis. 75 percent of Americans are worried about their own ability to achieve a secure retirement.

Source: National Institute on Retirement Security
Source: National Institute on Retirement Security

Listed below are some interesting findings in the report:

  • Almost 40 million working-age households do not own any retirement account assets, whether in an employer-sponsored 401(k) type plan or an IRA.

  • 50 percent of the 40 million households with no retirement savings are headed by someone between age 45 and 65.

  • Households that do own retirement accounts have almost 2.5 times the annual income of households that do not own a retirement account.

  • 62 percent of working households, age 55-64, have retirement savings less than one times their annual income.

  • Only 55 Percent of Private Sector Workers Have Access to a Retirement Plan at Work.

  • Only 51 Percent of Working-Age Households Participate In Workplace Retirement Plans


You can view the entire report on the NIRS website: The Continuing Retirement Savings Crisis
 
Author: Brian McKay
March 12th, 2015