Compounding interest is one of the amazing wonders of the world. A thirty year old saving just $300 per month for 30 years until age 60 earning just 4% annually could accumulate almost $210,000. Think about it, that’s only $10/day, one less latte for the morning. Saving $1,000 per month or $12,000 per year would accumulate close to $700,000 for a nest egg.*
Only 1 in 4 people Age 55 and Over Had Saved More Than $300K. As respondents get older, the gap between the savers and the save-nots widens. Although a larger portion of people age 55 and over report high-balance retirement funds, there remains a significant subgroup that has little to no retirement savings:
- About 3 in 10 of respondents age 55 and over have no retirement savings.
- 26% report retirement savings with balances of under $50,000, an amount that is insufficient for people nearing retirement age.
- Over half (54%) of people age 55 and over have balances far behind typical retirement fund benchmarks for their age group.
It’s not all bad news, however:
- After “less than $10K,” the most common balance Americans have saved for retirement is “$300K or more.”
- A significant 13% of Americans’ retirement savings balances are in the top bracket.
“The fact that so many Americans do have $300,000 or more saved for retirement goes to show just how easily the amount of money in your retirement fund can grow over time if you are dedicated to contributing regularly,” Bonner said.
There are, of course, roadblocks that stand in the way of saving for your future. One of the biggest problems is the rising cost of education: College students are loaded down with student loans even before they graduate. It’s tough to begin saving for retirement when they have more than $25,000 in student loans to repay. There is usually a long list of poor financial decisions preventing us from taking control. With our consumerism dominated society, simply spending less than one’s income is key. Some spend more for vacations than they save for retirement. And parents are going into debt spoiling their kids as they try to keep up with the Joneses.
Saving can be hard. We can help. To help start your journey to financial freedom, contact us – we’d like to hear from you.
Raymond James is not affiliated with GoBankingRates or Kristen Bonner.
*This is a hypothetical illustration and is not intended to reflect the actual performance of any particular security. Future performance
cannot be guaranteed and investment yields will fluctuate with market conditions.
The information contained in this report does not purport to be a complete description of the securities, market, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate, or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. Prior to making an investment decision, please consult with your financial advisor about your individual situation. Investing involves risk and investors may incur a profit or a loss. Past performance is not a guarantee of future results. Opinions expressed in the article are those of the author and are not necessarily those of Raymond James. All opinions are as of this date and are subject to change without notice.