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 © 2014 Microsoft. All rights reserved.
ABOUT SMART SPENDING
LATEST BLOG POSTS
New rules mean that longevity annuities -- insurance against outliving your money -- are more attractive for retirement savers.
VIDEO ON MSN MONEY
BLOGS WE LIKE
MUST-SEE ON MSN
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'