Let’s talk savings for a second. I saw an article the other day that was pretty eye opening to me. Did you know that 35% of Americans have nothing in savings at all. Not even a dollar? 34% have only a few hundred. 52% of Americans don’t own a single stock or stock-based account like a money market account. Almost half of working adults have nothing saved for retirement at all. Of those that do have any money set aside for retirement, the average amount saved is only $25k, which might seem like a nice chunk of change, but most Americans will blow through in less than a year. What does that mean? It means 22% of married Social Security recipients and 47% of single recipients depend on Social Security for 90% or more of their income, not drawing a penny from any retirement savings.
So where is this lack of savings coming from? The current non-savings climate hasn’t always been the case. Our grandparents scrimped and saved all the time, but it seems the current generations aren’t fond of it. There are some that believe the “live for today” or YOLO ideology are to blame and have been adopted by millions.
Life is short, so live every moment to the fullest and figure out the rest later. I do get the sentiment behind that. I want to travel and have adventures and live a full life before retirement age. I want to take advantage of my youth and health now. But, the thought of having nothing stashed away for retirement and depending on social security to pay my bills freaks me out. If I blow everything living it up now, what happens when we’re in our 60s or whenever and ready to retire and we simply can’t because there is no money to do so. We keep on working, just like millions of Americans forced to work passed “retirement age.” Or we’d go into massive debt after we retire like 61% of 60+ households!
What are your thoughts on this? Do you think it makes sense to spend now and save later? Is there a benefit to enjoying what your hard works pays for while you are still a spring chicken? Do you think saving for retirement is important? Is it a priority for you?
The following is what experts say you should have saved at every age. Do you agree?
- In your 20s: Aim to save 25 percent of your overall gross pay
- By age 30: Have the equivalent of your annual salary saved
- By age 35: Have twice your annual salary saved.
- By age 40: Have three times your annual salary saved.
- By age 45: Have four times your annual salary saved.
- By age 50: Have five times your annual salary saved.
Do you agree? Was that pretty eye opening? Are you panicking a bit or is your saving on track?