Americans Don’t Put Enough Toward Retirement: Experts Say This Is the Magic Number
Written by
Adam Palasciano
Edited by
Nicholas Morine
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Retirement is supposed to be a well-deserved time in your life. You’ve worked hard for decades and hopefully, you saved and invested enough money along the way. Well, for some, this isn’t the case.
Many Americans neglect retirement savings altogether and aren’t financially equipped to retire anytime soon.
Take it from Gen Zers, who are more interested in “soft saving,” according to CNBC. The idea behind this movement is you focus on experiences that bring you enjoyment and promote your well-being now, and save less for the future. This relaxed approach toward retirement means working longer — or perhaps not retiring at all.
You might be wondering: How much do I have to save now, so that I can comfortably retire as a millionaire?
15% Is The Magic Number
“Shark Tank” star and successful businessman Kevin O’Leary explained to “Good Morning America” that it’s possible to retire a millionaire on an average income — but doing so requires discipline, as highlighted by GOBankingRates.
“The average salary in America is $60,000,” O’Leary explained. “If you invest 15%, you’ll end up with $1.5 million in the bank after a career, because it compounds with market returns of 6% to 8%. And you can do it with anything — all these apps you’ve got that are available out there, fintech apps, you could download and do this. You must invest 15% — minimum.”
He explained further that adjusting your lifestyle to ensure that you can save a minimum of 15% toward retirement no matter what should be your top priority.
Many Americans Save Very Little (Or Nothing At All) For Retirement
A GOBankingRates survey asked, “What percentage of your salary do you put towards a retirement plan such as a 401(k)?” Here’s what respondents had to say:
- 0%: 39% of respondents.
- 1-3%: 12.84% of respondents.
- 4-6%: 12.54% of respondents.
- 7-9%: 5.37% of respondents.
- 10%: 11.14% of respondents.
- 11-14%: 4.38% of respondents.
- 15%: 5.17% of respondents.
- 16-19%: 3.58% of respondents.
- 20%: 3.18% of respondents.
- 21%+: 2.79% of respondents.
Nearly two-fifths of Americans don’t save any percentage of their salary toward retirement. At the same time, only 5.17% contribute at least 15%, the minimum required to retire as a millionaire.
Saving for retirement early and often is crucial to building the foundation for a bright financial future.
