Only 12% of Retirees Have the Right Amount of Savings—Will You?
There are retirement savings steps you can take now to help yourself down the line.
It's the thought at the back of everyone's mind: How much money do I need saved to comfortably retire? In many ways, that's a complicated question. What does it mean to "comfortably retire," for one thing? That could mean moving to a slower-paced town, where rent is significantly more affordable. But others may have dreams of retiring near the water or in the mountains, in which case, the cost of living will likely be higher. Regardless of your plans, however, there may be an ideal amount of retirement savings to keep in mind.
When it comes to how much you need to have saved, there are countless factors to consider. Debt—whether it's credit debt, medical debt, or a mortgage—certainly comes into play. Perhaps you're financially responsible for another relative or want to contribute money to a college fund. Or maybe you feel like you need extra funds to travel. All of these elements can and will affect your answer. That said, having a data-driven and specific number in mind may be helpful.
But what if we told you that only 12 percent of retirees actually leave the workforce with the ideal amount in savings? According to financial news outlet Benzinga, Americans need $555,000 in savings to retire—and the average retiree isn't reaching that threshold. Data from Benzinga shows that the average retiree in 2023 had only about $170,726 in retirement savings. That's a 10 percent decrease from 2022.
Interestingly enough, 37 percent of those who did retire did so without any savings. That statistic is also on the rise, having gone up by 7 percent since 2022.
Starting a savings account when you're young is key, say retirees, many of whom regret not taking action sooner. According to Benzinga, 51 percent of people say they didn't prepare for retirement adequately. Better money management and a better understanding of how much is needed "for a comfortable retirement" are among the things they wish they'd done differently.
In order to pay for basic necessities such as groceries and healthcare, 45 percent of retirees noted that they had to pull back on extra amenities, such as entertainment, travel, and eating out. The steady rise of inflation has also had a serious impact on retirees, with 44 percent struggling to afford the essentials.
As you continue building your own retirement savings, Benzinga says there are things you can do now to help yourself down the line. These include starting a savings account early, making regular contributions, aiming to reduce high-interest debt, building an emergency fund, delaying social security benefits, and contributing the max to your retirement accounts. When in doubt, speak with a financial consultant to make sure you're on the right track.
Best Life offers the most up-to-date financial information from top experts and the latest news and research, but our content is not meant to be a substitute for professional guidance. When it comes to the money you're spending, saving, or investing, always consult your financial advisor directly.