How Much Do You Need to Fund Retirement? More than You Think
A new study indicates that those saving for retirement will need to increase dramatically the percent they save for retirement if they want to fund their desired standard of living in retirement. Americans presently save on average 5.5% and 401(k) plan participants deferred, on average, 6.8% of their salaries into retirement plans in 2015. But those savings rates are far below what’s needed to fund retirement given today’s markets, according to research. It shows that a 35-year-old couple with household income of $50,000 would need to save pre-tax about 11.1% to 13.1% to maintain their standard of living while the same couple with household income of $100,000 would need to save 13.4% to 16.8%. Several factors are to blame, including low future investment returns, longevity, and unrealistic legacy goals.
Source/more: USA Today