According to the Employee Benefits Research Institute’s (EBRI) 2018 Retirement Confidence Survey, American workers have both a vital—and pressing—need to prepare better for retirement. Nearly 8-in-10 American workers have less than $250,000 set aside for retirement. And 60 percent of American workers have not crunched the numbers on how much they’ll need to live on in retirement.
To help answer how much you need to retire and demystify this important—and urgent—topic, I’ve listed out four scenarios to consider when creating and contributing to your retirement savings goals:
- What, and Who, is the Money For? Before determining the amount you need for retirement, decide whether you want to travel the world, move to a new state, donate to charity or support loved ones with your retirement funds.
- Save to Cover 60-80% of Work Pay: Your retirement savings goal includes your personal contributions to your workplace retirement plan, any employer contributions to your plan, plus any investment earnings you may receive over time.
- Retirement Dates are Sooner Than You Think: Almost half of retirees reported that they left the workforce sooner than expected, so be prepared in case this happens to you.
- Look Out for Blind Spots: Keep your eyes peeled for the potential blind spots that could undermine your plan—like longevity in retirement and medical expenses as you age—and make sure you have the funds to cover unforeseen costs.
For more guidance on shaping your retirement savings strategies, a CFP® professional can help you uncover your projected retirement savings goal and how to get you there.