Many are saving lots for retirement
Retirement crisis? New data suggest that only 15% to 25% of Americans will be poorly prepared for their retirement years.
This post comes from Anne Tergesen at partner site SmartMoney.
When discussing retirement readiness, many point to data that show American workers haven't saved enough in their 401ks to do more than buy a luxury car. But Fidelity took a look at the combined amounts investors with both IRAs and 401ks have managed to save. And the results aren't that depressing.
"The findings show a combined average balance of $212,600," the company reports. Better still, among those ages 65 to 69, the combined average balance is $359,000. (Post continues below video.)
Depending on where you live, of course, that may not be enough to ensure a comfortable retirement. But it's far higher than the $123,400 the average 65- to 69-year-old has in his or her 401k alone. (How much money will your 401k provide?)
Kathleen A. Murphy, the president of Fidelity's personal investing unit, writes that the analysis "clearly underscores the importance of using both an IRA and 401k to help maximize long-term, tax-deferred growth potential."
- A new report suggests 60% of Americans are prepared for retirement. Most studies, Utkus adds, "suggest that over half of Americans are on track in their retirement planning."
- Of those who are not fully prepared, Utkus argues that many are within striking distance -- and can reach their goals by saving more or working longer. "I'd argue that probably 20% to 30% of Americans are in this partially ready camp," he says.
- "Finally, there's a smaller group -- I'd estimate between 15% and 25% of all Americans -- who are likely to be very poorly prepared for retirement. The distinguishing characteristic of this group is that they're struggling financially in their working years. In other words, a difficult life while working usually translates into a difficult life in retirement."
In conclusion, Utkus notes that "much of the national dialogue on retirement assumes that there are few Americans in the first two groups (on track or close to being on track for retirement) and many of us in the third group (poorly prepared for retirement) -- exactly opposite of what the data suggest."
More from SmartMoney and MSN Money:
- Calculator:Am I saving enough for retirement?
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
ABOUT SMART SPENDING
Editor Bev O'Shea lives and works in the foothills of the Appalachians. A former copy editor for The Atlanta Journal-Constitution and the Orlando Sentinel, she joined MSN Money in 2007. She's a fan of sunsets, college football and free shipping, among other things.
Having worked as a writer, reporter and editor for more than 25 years, Editor Julie Tilsner is the sort of person who can't help but correct grammar in Facebook postings and on billboards. She's written for BusinessWeek, the Los Angeles Times, Parenting, Redbook, AOL and others. She lives in Los Angeles County with her family and loves to drink wine and practice yoga, although not generally at the same time.
A writer for MSN Money since January 2007, Donna Freedman won regional and national prizes during an 18-year newspaper career and earned a college degree in midlife without taking out student loans. She also writes about smart money tactics for magazines and on her own site, Surviving and Thriving.
Mitch Lipka has been warning people about scams and shining light on questionable business practices for more than 20 years. Mitch, the consumer columnist for The Boston Globe, has also been a reporter and editor at The Philadelphia Inquirer, Consumer Reports, South Florida Sun-Sentinel and AOL. He won the 2010 New York Press Club award for best consumer reporting online and was honored in 2011 for his reporting on child product safety.
Marilyn Lewis is an award-winning writer with a passion for getting readers clear, straight information that helps them stay out of financial trouble. A former reporter for The San Jose Mercury News, she works from her home in Port Townsend, Wash. Contact her at MarilynLewis@Outlook.com.
LATEST BLOG POSTS
These airlines have taken a la carte flying to a new level, charging for everything you can think of and then some.