How are Americans saving for retirement?
The short answer is: They aren't. (Or at least not as well as they'd like to be.)
The economy may be improving, but try telling that to the 40 percent of U.S. workers who don’t feel they’ll be ready to retire until they’re 70 or older.
According to a new CareerBuilder survey, of workers aged 60 and older, the majority of men (57 percent) and nearly half of women (48 percent) are putting off retirement.
Why the delay?
While some workers may simply not want to retire, others don’t feel financially ready. In fact, nearly a quarter of workers (24 percent) say they’re not sure how much they even need to save for retirement.
When asked how much money they think they'll need to save in order to retire, workers said:
- Less than $500,000: 20 percent
- $500,000 to less than $1 million: 31 percent
- $1 million to less than $2 million: 14 percent
- $2 million to less than $3 million: 5 percent
- $3 million or more: 7 percent
Retirement plan? What retirement plan?
It’s hard to plan for retirement when you’re not putting any money away for it, which is the case for nearly a quarter of workers nearing retirement age. Twenty-three percent of workers 55 and older say they don’t participate in a retirement plan, such as a 401(k) or IRA. Among adults ages 18 to 34, that number is even higher, at 40 percent.
Tips for saving for retirement
If you haven’t started saving for retirement yet, there’s no time like the present, as they say. Here are a few tips from around the web to get you started.
- Start now: Start saving and investing as much as you can now. Financial experts generally recommend putting about 15 percent of your salary toward retirement. If you can’t afford that, save as much as you can, and increase it as your circumstances allow.
- Contribute to your 401(k): If you have a 401(k) through your employer, contribute as much as you can – especially if your employer offers to match your 401(k) plan. It’s essentially free money, so take advantage.
- Open an IRA: Even if you already have a 401(k) through your employer, opening an individual retirement account (IRA) helps you save even more. (Forbes has some good advice for choosing the IRA that’s right for you.)
- Take inventory of your spending habits. Are there areas where you can save? For instance, look for ways to save money at the grocery store, lower your cable bill and pay less for your cellphone. The more money you can save on a regular basis, the more you can put toward retirement.