In my previous post, we saw that survey respondents frequently say they guess when deciding how much they need for retirement. Let’s take the next step, how much did they think they need?
How Much Do You Need to Save for Retirement?
|$250 – $499K||
|$500 – $999K||
|$1M – $1.49M||
|$1.5M or More||
Source: EBRI Retirement Confidence Survey, 2011, www.ebri.org
Since so many respondents guess, it’s no surprise that they underestimate how much money they need.
Let’s use a very simple calculation to show how far off these figures can be. The average retirement age is around 64 for men and 62 for women (based on an analysis of census date by the Center for Retirement Research at Boston College). The average life expectancy at retirement age is about 20 years.