If you think that six-figure salary you’re earning will guarantee a comfortable retirement, you’d better think again. Even the sizeable nest egg that a high salary could provide can get swallowed by soaring housing costs and big medical bills. And that’s assuming you’ve been saving and investing adequately for your retirement in the first place.
If you haven’t been putting much money aside for when you stop working, you are hardly alone.
The National Institute on Retirement Security found that almost 40 million American households have no retirement savings at all! Of those who do, the average retirement savings is $95,776, according to the Economic Policy Institute. For those closer to retirement (ages 56-61), the average is $163,577.
For most people, that is simply not enough to meet their needs for the roughly 30 years they could live after they cut that retirement party cake.
Unlike their grandparents, today’s 30-something workers are not likely to get traditional pensions–fixed sums typically paid out for life by their long-time employers. Only 32 percent of today’s retirees have pensions, a number that is trending downward. Nor can you count on those Social Security checks to meet most of your needs. The Social Security Administration says the average payment this year is $1,360 a month. That wouldn’t even cover the rent or the mortgage payment in such expensive housing markets as Los Angeles and New York City.
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