From today’s WSJ
Fifty-seven percent of U.S. workers surveyed reported less than $25,000 in total household savings and investments excluding their homes, according to a report to be released Tuesday by the Employee Benefit Research Institute. Only 49% reported having so little money saved in 2008.
I found the report and thought this graphic that breaks down savings by age group was troubling:
Only 42% of those 55 and over have a $100,000 or more in retirement savings. Wow! What kind of retirement, if any, can they (or the other 58%) plan on having?
Even worse is the fact that a lot of people have no idea how much they will need during retirement. Here is a quote from one part of the report:
Forty percent of all workers think they need to accumulate at least $500,000 by the time they retire to live comfortably in retirement. Twenty-one percent feel they need between $250,000 and $499,999, while 29 percent think they need to save less than $250,000 for a comfortable retirement…
A lump sum of $250,000 placed in a 20-year fixed immediate annuity with a 3% to 5% interest rate, will produce an annual income of $16,000 and $19,000. Even combined with social security income, that’s hardly a comfortable retirement.