US Retirement Savings is Not Keeping Pace

Startling financial news has hit the media in the past few weeks, as personal-finance news website GoBankingRates.com shared recent data that clearly shows how retirement savings is not keeping pace for families in the US.

If you are an average worker in your forties, you’re making decent progress toward retirement, with a bit more than $81,000 saved in various ways for that golden day. However, if you happen to fall into the mean of workers, those in the 50th percentile, you’re in serious trouble, with barely $6200 in retirement saving stashed away.

This is according to a report titled, “The State of American Retirement”, from the Economic Policy Institute (EPI). The report emphasizes that, because so many families have zero savings, and since super-savers can pull up the average, the median savings number is likely a better gauge of whether those in your age group are saving enough.

Retirement Plan Participation Declining

Overall, participation in retirement plans has declined or grown stagnant since the new millennium, even as baby boomers approach retirement age, with retirement savings for that group falling by nearly 25% in the past half-decade alone.

Mean Retirement Income by Age Group

Source: EPI analysis of Survey of Consumer Finance data, 2013.

Most revealing is the comparison of mean versus median retirement income, from the study. As mentioned above, a significant number of Americans possess not savings at all, with 70% of us having less than $1000 saved; while a statistically significant number are described as “super savers”, with extremely large reserves available.

Median Retirement Income by Age Group

Source: EPI analysis of Survey of Consumer Finance data, 2013.

“Breaking the survey data down a bit further, we find that 34% of Americans don’t have a dime in their savings account, while another 35% have less than $1,000. Of the remaining survey-takers, 11% have between $1,000 and $4,999, 4% have between $5,000 and $9,999, and 15% have more than $10,000.” (USA Today)

This is sad news indeed for those of us in the wealth building business, as we realize that a large portion of the population have done little to no planning for their futures, or the futures of their families.

The good news is… It doesn’t have to take decades to create a better financial future – but it does take the right actions. I have been working with clients for 15+ years to help them grow and secure their finances for a prosperous future.

Do you find yourself in one of these categories, struggling to save for retirement and failing? What is holding you back, and what do you believe will help you to set and achieve financial goals for your future? Share your ideas or questions in the Comments Section below.

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