The new retirement age is 70 — at least for almost half of Americans, says a recent study. And it’s because they don’t know how much they’ll need to save.
Fifty-five percent plan for Social Security to be their main income source, according to insurance company Nationwide. But 63 percent say they don’t understand how it works.
In this roundup, we go over retirement planning: from men postponing retirement more than women, to more working Americans taking interest in retirement income plans like pensions.
Working later
A quarter (24 percent) of Americans are unsure how much they need to save for retirement. And a minority think it’s the amount that AARP recommends. For a comfortable retirement, the group, which advocates for seniors, says to save $1 million to $1.5 million for retirement. That is to pay for housing, food, healthcare and all life’s necessities for the rest of your life.
But according to CareerBuilder, American workers think they’ll need this much to retire…
- Less than $500,000: 20 percent
- $500,000-$1 million: 31 percent
- $1 million-$2 million: 14 percent
- $2 million-$3 million: 5 percent
- $3 million or more: 7 percent
And people are living longer, which could be causing the confusion. AARP says the average 65-year-old couple has a 43 percent chance of living to 95.
“Postponing retirement will make an impact across all of our country’s workforce, along with retirement policy and financial and healthcare planning,” says Rosemary Haefner, chief human resources officer at CareerBuilder. “With workers staying in their jobs longer, employers are adjusting hiring needs, but also reaping the benefits of the extra skills and mentoring abilities of mature employees.”
A quarter (23 percent) of workers 55 and older do not have a work-sponsored 401(k) plan to save for retirement. So how are they saving for retirement?
Social Security
Most will turn to Social Security. As already pointed out, more than half will rely on it, while only 18 percent have a pension to fall back on.
