56% of Americans don’t know how much they need to retire—here’s why that’s a problem

Many Americans aren’t taking these steps to plan ahead, and it shows in their bank accounts. A worrisome 22% have less than $5,000 in savings earmarked for retirement, Northwestern Mutual found. Another 5% have between $5,000 and $24,999 put away and only 16% have saved $200,000 or more.

On average, survey respondents say there’s a 45% chance that they’ll outlive their savings. Yet despite being aware of this, 41% haven’t done anything to improve their situation.

If you’re unsure how much you should be putting away for the future, Holbrook recommends sitting down with a trusted financial professional who can help create a personalized plan. “People absolutely should be taking steps,” she says. “They need to meet with a financial advisor and discuss their options.”

To get a ballpark idea of how much you should aim to save, Nick Holeman, a certified financial planner and senior financial planner at Betterment, says to start by asking yourself two simple questions:

  1. What age do you want to retire?
  2. How much do you want to spend per year in retirement?

From there, you can begin to calculate how much you might need. It’s also important to consider factors such as life expectancy, taxes, Social Security and how much debt you have, he says.

Financial services company Fidelity also offers guidelines on how much you should aim to have saved at different milestones if you want to retire at 67.

  • By 30: Have the equivalent of your salary saved
  • By 40: Have three times your salary saved
  • By 50: Have six times your salary saved
  • By 60: Have eight times your salary saved
  • By 67: Have 10 times your salary saved

For more information on how to figure out if you’re on track to have enough saved in retirement, check out the following resources.

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