Americans are not saving enough! Based on the latest statistics from a large national investment company, Americans savings are far below what your means will be at the ideal retirement of your early to mid 60s. This article will focus on what the data shows, what you will need to retire, how you can increase your savings, and what tools and services Whitaker Myers Wealth Management provides to help!
Below you'll find the average savings rates and current amount saved, on average, for Americans in their 30's, 40's, 50's & 60's. The numbers present an upside down situation. Meaning, savings rates increase with age, but in reality the more you can save at younger age, the less you have to save when you're older. Remember Dave Ramsey's example of Ben & Arthur? Let's see what Americans are currently saving....
Age 30
The average savings in retirement is $38,400 with a contribution rate of 8%. At this point in your life, you should be in a field or job that you will stay in till retirement. Not saying that you should not leave and follow your dreams. But if you are to change careers, it should be a step up from your current position. Aka, more money, better benefits, higher positions. But at this stage, you should have your career field established and working to be the best (fill in the blank) to ever do it!
Age 40
The average savings in retirement is $93,400 with a contribution rate of 8%. This figure is very low for this age bracket. If you are following the Dave Ramsey Baby steps, your debts should be paid off and have a minimum 15% put away in the retirement (Baby Step 4-6). At this stage in your career, you are established and have progressed in your field to a respectable position. With said progress, promotions and pay increases have increased your wealth. While not suggesting all of the additional wealth goes into savings, your annual contribution should be higher than that ten years ago.
Age 50
The average savings in retirement is $160,000 with a contribution rate of 10%. You are getting close to the finish line in your work career. Do you have enough in savings? According to this data, no way! Did you notice how contribution rates increased between the age groups of 40 to 50? It went from (on average) 8% to 10% contribution rates? People are getting nervous about their savings and noticing that they do not have enough to retire. Therefore their reaction is increasing their contributions.
Age 60
The average savings in retirement is $182,100 with a contribution rate of 11%. Can you retire on $182,100? It depends on your lifestyle but this amount of assets would only produce $600 / month of income (based on the 4% rule) therefore with a Social Security Benefit of $2,000, you’d better be debt free. A savings amount at this level, could force you to continue to work into your later years, which is ok for some individuals. But you should not need to work in your 70s and 80s.
Get Back on Track - 15% of Income Towards Retirement
What if I review the data above and realize that I am currently average? There is a plan! It’s called the Baby Steps and we recommend you begin to follow those steps with gazelle intensity. The sooner you work through Baby Steps 1, 2 & 3, the sooner you’ll be able to start contributing 15% of your household income towards retirement and getting those retirement numbers up to where they need to be. However, the older you are, there is less time to leave to chance, which is why we recommend hiring a Financial Coach. Whitaker-Myers Wealth Managers has a Ramsey Solutions Master Series trained coach on staff to help you work through Baby Steps 1, 2, & 3 and be that in house accountability partner you and your spouse are looking for!
“Financial Coaching is all about helping you become better with your finances. In the world where most financial advisors have a minimum investment size finding someone who can help you deal with the burdens of debt, help you achieve money goals outside of investing or just help you improve your marriage, because as we know money fights and issues are one of the major causes of divorce in America, financial coaching is here to help! Whitaker-Myers Wealth Managers Mission states that we, "strive to have the heart of a teacher, so that we can empower and equip people with the knowledge and tools they need to be able to achieve their goals and feel confident about their financial future. We do this by providing integrity-based financial planning and investment advisory services that are tailored to the specific needs, goals and values of each client." Hence, to further this mission, we launched Whitaker-Myers Financial Coaching to help those individuals and families that had no investable assets but wanted to improve their lives financially and holistically.” -Whitaker Myers Website
Our Certified Ramsey Solutions Master Coach, Lindsey Curry, will work with any unique situation and develop a plan to get you debt free and build wealth. Yes, there is a subscription cost. Think of a health coach. You’re paying for someone to help you get healthier and for them to develop a personal plan to reach your goals that you cannot get on your own. Not to mention the experience and knowledge they can provide. Lindsey provides just that, just in the realm of your personal finances. For more information, please visit our financial coaching website to view in more detail. You may email Lindsey at lcurry@whitakermyerswealth.com or call her at 330.345.5000 ext. 317.
AMERICAN SAVING RATES BY AGE: BEN & ARTHUR
April 27, 2022
Whitaker Myers
Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.
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