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The average American will never retire at the rate they’re saving.
Financial planners recommend saving 10 percent-15 percent of your salary for retirement. Americans save less than 8 percent, according to PenFed Credit Union.
Right now, 63 percent have less than $5,000 saved. And if handed that much money, only 23 percent would put it towards retirement.
Not saving for the future
It’s not that Americans don’t want to save for retirement, it seems many have higher financial priorities today.
Given an unexpected $5,000, most Americans (55 percent) would use it to pay their bills, or a debt (41 percent). When considering how to disperse their newfound jackpot, Americans would put half (48 percent) into savings, spend 42 percent, then give 10 percent away to charity, according to PenFed.
And it’s not that Americans flat out don’t save — they just don’t save enough. Only 18 percent of Americans say they never save money. Then 61 percent save on a monthly basis, while 82 percent save on a yearly basis.
PenFed didn’t determine how much Americans save during those time periods. However, Americans should set a goal to save 25 percent of their salary before taxes are removed while in their 20’s, according to a report from CNBC. Then, by your 30’s, you should have the same amount as your annual salary saved. So, if you earn $40,000 a year, that’s the amount you…
