Will YOU Be Able to Afford Retirement?

Between problems with the social security fund, and the demise of the defined retirement benefit programs, there has been a great deal of discussion lately about retirement and whether people will be able to afford to retire. Now, comes this study, reporting on how many of us will be able to afford retirement (given various assumptions).

If nothing else, this article will make you think about whether you are going to be ready to retire. Here are some answers to some interesting questions about retirement plans and the ability to afford to retire:

1. What is the average amount of money that families nearing retirement have in their 401(k) plans?

2. What % of families will be “at risk” of not meeting their retirement incomes they need (“at risk” to mean those households projected to fall at least 10 percent short of their income target in retirement)?

3. What groups are most at risk (as defined above) in terms of having sufficient retirement funds?

1. What is the average amount of money that families nearing retirement have in their 401(k) plans? ANSWER: Only $60,000 — if you are relying on these funds for retirement, you better start saving alot more fast.

2. What % of families will be “at risk” of not meeting their retirement incomes they need (“at risk” to mean those households projected to fall at least 10 percent short of their income target in retirement)? ANSWER: 43% — that is alot of people, in my opinion.

3. What groups are most at risk (as defined above) in terms of having sufficient retirement funds? ANSWER: Low-income Gen Xers (born between 1965 and 1972) are at the highest risk, as it is estimated that 60 percent will have insufficient funds in retirement.

The lesson is clear to me: Start saving a lot of money as soon as you can. The study estimates that even small increases in savings can make a big difference. I’m not so sure (depends on alot of factors), but it seems clear to me that planning is critical here.

Go here to read more about the future of retirement and who is at risk.