By Steve Dinnen
When I was doing a little research for our recent story on changes to retirement savings plans, I spotted some truly bleak news: We are in desperate straits when it comes to saving for retirement.
Just 65% of employees who are eligible for workplace 401(k) programs actually participate. Among those who do, 40% take cash out of their plan when they change jobs. This both depletes their account and triggers a tax penalty that further reduces their income. Experts estimate that 20% of people who lost their jobs during the pandemic cashed out their 401(k) plans altogether.
According to U.S. Census Bureau data, 50% of women and 47% of men between the ages of 55 and 66 have no retirement savings. Zero.
Among those who have squirreled away some money, the Federal Reserve estimates that the average American has $65,000 in retirement savings. That bumps to about $255,200 by the time the average American hits retirement age. Statistically, about 10% of retirees have saved at least $1 million.
If you’re reading dsmWealth, you already know about the importance of saving. But if you need help or you know someone who does, contact a financial planner ASAP to get on the right track.
