Across a variety of measures, Americans tend to be under-saved for retirement. Forty-three percent of workers have less than $10,000 saved for retirement, according to the Employee Benefit Research Institute’s retirement confidence survey; even among those who have saved for retirement, the average 401(k) balance is just $74,900 — far less than most planners recommend, especially for those nearing retirement.
So what’s going on here? Many cite some kind of life event, be it having kids or losing a job, as a major impediment to saving for retirement, according to a new ING Direct survey released this week. Here are some of the major events that Americans say got in the way of their saving for retirement.
|Having Children||Caring for an Aging Parent||College||Household Bills||Buying a Home||Job Loss||Vacation||Wedding|
|Age 20 – 29||23%||5%||29%||10%||14%||17%||1%||6%|
|Age 30 – 39||40%||7%||19%||24%||14%||18%||3%||4%|
|Age 40 – 49||34%||10%||16%||22%||15%||21%||4%||3%|
|Age 50 – 59||27%||14%||18%||19%||15%||25%||3%||3%|
Some of these expenses, like household bills and job loss, may be unavoidable, but others, like a wedding or vacation, shouldn’t be prioritized over saving for retirement, says Dan Greenshields, president of ING Direct Investing. And when it comes to kids or caregiving, “put yourself first if you can,” he says. “If you don’t, you may end up living with your kids.”
To figure out how much to save for a comfortable retirement, click on SmartMoney’s Retirement Planner here.