According to a recent survey by Bankrate, 10 percent of Americans aren't saving anything at all for retirement. And according to the National Institute on Retirement Security, the median balance for all American households near retirement is $14,500. That's for households near retirement! When you add in the younger demographic, the numbers are even more alarming: The median balance for all American retirement account balances is $2,500.
In other words, people aren't taking retirement planning seriously – even those who are approaching that major milestone in their lives. And with only 53 percent of American workers offered a retirement account through their employers, financial planning is largely falling on individuals to decipher.
Unfortunately, individuals are not taking matters into their own hands, as they should be.
Many workers report feelings of pessimism regarding retirement. Many companies are phasing out pension plans, placing more of the burden for retirement planning squarely on their employees' shoulders. The Great Recession knocked a dent into many Americans' financial portfolios, and we're seeing plenty of people well into their sixties who have yet to retire. Once you consider inflation and the rising cost of health care, it's no wonder many workers have decided they're unlikely to ever retire.
But of course, economic conditions change over the years. We shouldn't assume that the dire conditions we see today necessarily need to last forever. Experts advise that millennials begin saving now, so that they can take advantage of compounding interest over the decades.
If you're behind on your retirement plans, or if your company doesn't offer a pension or retirement fund, you need to take matters into your own hands. Talk to a financial advisor about establishing an Individual Retirement Account or other savings vehicle. Start making regular and catch-up contributions if you're eligible. If you're worried about your ability to retire, your financial professional can analyze your situation and make suggestions to help you get back on the right track.
Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.