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President Trump has come into office with a tall order at hand: To restore faith in our ability to retire on time… or at least come close.
But unfortunately, the reality is that the numbers aren’t in his favor… or ours. A 2015 study by the Transamerica Center for Retirement Studies should serve as a good reality check for the state of retirement in the US.
According to this study, Americans believe they need $600,000 for their retirement. Now, given that those who reach retirement age can expect to live another 20 years, this number seems reasonable.
But here’s the problem: almost no one saves that much money. The same study reports that older workers (those at least 50 years old) have a median retirement savings of just $135,000.
That’s less than 25% of what they think they’ll need to enjoy their golden years!
Even if this $135,000 was saved by the age of 50, they would still need a combined savings and growth of $465,000 over the next 17 years to reach $600,000 by the time they could draw full Social Security benefits.
To reach this goal, they would have to contribute $11,000 into their retirement accounts every year and earn 6.00% on their dollars.
These are quite lofty numbers for someone nearing retirement.
If you think the retirement savings of workers 50 years and older are unimpressive, you should see the numbers reported by current retirees.
We dive deeper into these figures, looking at why people are reporting such modest nest eggs, to gain perspective on the future of the retirement landscape in our latest infographic: How Will Trump Restore the Dream of the Golden Years?