“How am I doing?”
That’s a big question that most people have when it comes to their money. But don’t look to neighbors, friends, and family to see if you are on track or keeping pace. Instead, it’s important that you look at stats with the proper context.
For example according to Nerdwallet, here’s how average retirement savings break down by age:
|Age||Average Household Retirement Savings||Median Household Retirement Savings|
|35 to 44||$100,100||$37,000|
|45 to 54||$215,800||$82,600|
|55 to 64||$374,000||$120,000|
|65 to 74||$358,400||$126,000|
The Numbers Behind the Numbers
If these figures seem a bit low to you, you’re not wrong. Most financial experts believe that, generally, Americans are not saving nearly enough for retirement. People are living longer, more active lives than ever before, so your retirement assets have to last longer than your parents’ and grandparents’ did.
The responsibility for retirement preparation has shifted more and more to individuals, which will be challenging for anyone who’s significantly below these savings levels. And it’s going to be a BIG problem for the 43% of households headed by someone 35-44 without any retirement savings at all.
Is an “Average” Retirement Good Enough?
Imagine you’re an average 65-year-old with just over $300,000. Is that nest egg going to provide the retirement you’ve been dreaming about and working for most of your life?
There’s no one-size-fits-all answer to those questions. We all have different income resources, passions, goals, healthcare needs, and lifestyle expectations. And what happens if you or your spouse has need for long term care? What if you or your spouse lives beyond ‘normal’ life expectancy? Will an unexpected/unplanned event stretch your “average” retirement too thin?
And then there is the quality of life side of the coin. What if you decide you need to see more of the world? What if you can’t let go of that passion project you’ve always wanted to develop into your own business? Will your nest egg provide for changes that will make your retirement more fulfilling?
How Your Money Measures Up
Successful retirement planning balances the things that we can anticipate with the things we can’t. That’s why a true retirement professional should never hold up a graph comparing where your money is to where your peers are. Instead, such a professional should be interested in how your money measures up to what YOU want out of life and what you’ll need to stay comfortable on rainy days.
Click here to self-schedule a free 15-minute call. We can start a conversation that could lead to a review of your saving plan, spending levels, and much more. We can help you adjust as necessary to make sure that both are on track to hit the standard that matters most: yours.
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