The National Institute on Retirement Security released a survey this month. Some of their results show that among workers aged 55-64:
- One third have zero retirement savings.
- One third have retirement savings worth less than 1 year’s salary.
- Only 8% of them have retirement savings worth over 4 times their annual salary.
How much should retirees have in savings?
Fidelity recommends 7 times your annual salary, Aon Hewitt recommends 11 times, other brokers recommend numbers between 8-10 times your annual salary so that you can live on 85% of your working income. You can do some math to estimate how much you may need and determine whether your retirement will be closer to financial ease or financial struggle.
The City of Detroit just declared bankruptcy due to unaffordable pension obligations. Many states, cities, and companies also have underfunded pension funds. Sooner or later, either the pensions will be reduced or contributions will have to be increased (many times this is an impossible number). Are you prepared for a reduction in your pension income? Each day, 10,000 baby-boomers hit retirement age and will strain the budgets of any program they are relying for financial relief. Make certain your personal retirement is a prosperous one by doing it on your own and under your control.