11 Numbers That Will Terrify You Into Saving For Retirement Right This Minute

Putting it off another day can hurt you in the end
Last updated Nov 6, 2018 | By Laura Bostwick

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Convincing yourself to save for retirement can be tough – especially if you’re still decades away from leaving the workforce.

Or, even if you aren’t decades away from retirement.

Living expenses, debt, and day-to-day spending can devour your paycheck and make saving money difficult, but it’s still incredibly important – maybe more than you realize.

Instead of putting it off “just one more day,” make the decision to start saving right this very minute.

Here are some numbers that demonstrate why it’s so important:


That’s how much money 21% of all adult Americans have saved for retirement.[1]

Not one dollar – nope – literally zero dollars set aside for retirement.

You may be thinking it’s dependent on age, occupation, education, etc., but according to a recent study, these variables are spread across the board. These Americans, most of them employed, come from all over the country, and are every ethnicity and race. Their one commonality – they haven’t saved a nickel for retirement.

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Nearly 66% of employed Americans between the ages of 21 and 32 have nothing saved for retirement. Latinos who are working and fall within that age bracket jumps to 83%.

Reasons for this vary but include high housing costs and crushing amounts of student loan debt.[2]

In fact, an analysis of the 2015 U.S. Census data by Trulia[3] found that 40% of millennials are still living at home, which is the largest percentage since 1940, almost an 80-year period.

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1 in 3 baby boomers has $25,000 or less in retirement savings.[4]

This puts many of them in the danger zone, as this generation is the closest to retirement age.

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Recent reports suggest that by the time you hit age 30, you should have one year’s worth of salary saved.[5] The number gets bumped up to twice that amount by the time you’re 35, three times your salary by age 40, seven times at 55, and 10 times by age 67.

Following those exponential increases, someone who’s 67 and earning $100,000 a year should have $1,000,000 saved. That’s a tall order.

In reality, the average retirement savings across all age groups is $95,766.[6] Americans just aren’t saving enough, regardless of age.

So, are you doomed? No, there’s still time to get back on track. First, take advantage of your employer’s matching contribution on your 401(k), if it’s available to you. Then, start an IRA and contribute as much as you can. Squeezing your finances now can have a big impact on retirement savings later.


Have you heard this rule of thumb on retirement? For every $1,000 in monthly income you’ll need in retirement, you should have $250,000 saved.

By these calculations, if you estimate you’ll need $4,000 a month to live on when you retire, you’ll need to save $1,000,000.

Yes, really.

This rule assumes your investments will generate an annualized real return of 4% per year. In general, stocks are expected to produce annualized returns of give or take 7%, so this rule allows for inflation to devalue the dollar at roughly 3% per year.

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Turning age 50 makes you eligible to make “catch-up” contributions to your 401(k) plan.

Economic Policy Institute data tells us the average retirement savings of families aged 50 to 55 is $124,831. For families aged 56 to 61, it’s $163,577. So, if you’re able to contribute, this is the time to sock away more money.


Only 34% of working millennials participate in employer retirement plans, even though two-thirds of them have access to one.

However, the other 66% may not always be eligible to participate, despite working at a company that offers a plan.[7] For example, many employers require new employees to be with their organization for a minimum of one year before allowing them into retirement plans.

This policy can hurt retirement savings for millennials who tend to jump from job to job. According to the NIRS, more than half of millennials had spent a year or less with their current employers in 2014.

If you fall into this group, one workaround is to set aside money from each paycheck until you qualify for your employer’s retirement offering. Once you become eligible, dump the money you’ve saved into your new retirement account.


Only 5% of millennials are saving the recommended 15% of their salary for retirement.

If you’re a millennial who falls into this category, revamping your savings plan should be a priority. Saving for retirement through your job is a smart idea – especially with employer matching contributions. If you aren’t taking advantage of it, you’re leaving free money on the table. Even if you aren’t able to contribute a lot, every little bit counts when it comes to decades of compound interest. Using a compound interest calculator can help shed more light on how much your money can grow.

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20 years

The average American should plan for a 20-year retirement.

In retirement, you’ll need to replace 70% to 90% of your annual pre-retirement income through savings and Social Security.

So, for example, someone living on $63,000 a year before retirement would plan to live on $44,000 to $57,000 a year after retiring.


Beginning around 2034, the latest projections of Social Security show a 23% reduction, if nothing changes.[8]

As scary as that is, it’s good to let it sink in and improve your situation by saving ASAP.

Let’s look at some of the numbers:

If you were expecting $2,000 a month, your payout would shrink to $1,540.

If you were expecting $1,000 a month, your payout would shrink to $770.

For older Americans, it could mean certain poverty. Social Security provides the majority income for 61% of elderly beneficiaries.[9] For 33%, it provides 90% or more of their monthly income.

Recently, the average monthly retirement benefit was $1,368, or $16,416 per year. The overall maximum monthly Social Security benefit in 2017 for those retiring at full retirement age was $2,687, or about $32,000 per year.


81% of Americans have no idea how much money they’ll need to retire.[10]

While it’s understandable to a degree, since retirement savings amounts are based on several assumptions, it’s not an excuse for saving nothing.

In this case, ignorance is not bliss.

Start somewhere that feels attainable to you and go from there. Jumpstarting your retirement savings today – no matter what your age – can help you take ownership of your future. 

References: [1] Northwestern Mutal, [2] NIRS, [3] MarketWatch, [4] Northwestern Mutal, [5] Fidelity, [6] EPI, [7] NIRS, [8] Social Security Gov, [9] CBPP Org, [10] Merrill Lynch/Wave