A decade of no-growth for investments makes it difficult for people to save for retirement. When our investments aren’t making the return necessary to reach our retirement goals, we need to compensate for this by increasing our savings and contributions to investment accounts. If someone retires at the age of 65, they need $1Mil+ to be able to withdraw $50,000 per year (assuming 3% inflation and 5% return on investments).
In 2011, the Employee Benefits Research Institute found that 56% of workers had less than $25,000 in savings and investments for retirement, and that 29% of workers had less than $1,000 saved for retirement. LESS THAN $1,000 DOLLARS! Luckily, with this poor preparedness, Americans seems to be adjusting their expectations. In 1996, 11% of workers expected to still be working after age 65. In 2011 that number was 36%.
I think that a study conducted by Wells Fargo in 2010 is even more revealing because it breaks things down by age. The study included nearly 2,000 middle class households earning less than $100,000 annually, and it found that workers in their 50s had an median of $29,000 saved for retirement. Mind boggling.
Anyways, I just wanted to look up a few stats after seeing this infographic from Good. I love infographics because they’re great at conveying data and stats in an easy-to-comprehend format. Check out Good’s website for other informative infographics.