Most Americans believe they’ll require an average of $1.7 million to retire, as outlined by a new study from Charles Schwab. Researchers analyzed 1,000 401(k) plan participants throughout the country.
The Amount Of Money Americans Think They’ll Require to Retire
“The bulk of folks do not get there,” Nathan Voris, a managing director at Schwab Retirement Plan Services, told CNBC.
Over fifty percent of respondents surveyed state they are contributing 10% or less of their salary to their 401(k), which is the largest resource for retirement savings. The average annual contribution is $8,788, as reported by the Charles Schwab study.
However that likely won’t be nearly enough if you started saving later on life, the study finds. A person in their 20s who saves 10% to 15% of their salary annually likely would have enough to retire comfortably whereas a person who doesn’t start until age 45 or older will have to set aside approximately 35% of their salary annually, according to the study.
Yet, two-thirds of U.S. workers surveyed by the Employee Benefit Research Institute state they are “very” or “somewhat confident” that they’ll have enough to live comfortably throughout retirement. However only 42% have used retirement calculations to estimate just how much they’ll really need.
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