Americans are reporting slightly higher confidence in their ability to retire, but how best to get there continues to confuse many. According to the Employee Benefit Research Institute’s 25th annual Retirement Confidence Survey, nearly 40 percent of American workers think they need to save over 20 percent of their income each year to reach their retirement goals. Another 27 percent have no idea how much they should be saving. ‘Those without a retirement plan seem to understand they are likely to have difficulties accumulating adequate financial resources for retirement: 44 percent of workers without a retirement plan are not at all confident about having enough money for a comfortable retirement, compared with only 14 percent of those who have a plan,’ said Jack VanDerhei, EBRI research director and co-author of the report. If you start early, saving 15 percent a year will put you on track for a comfortable retirement. If you’re a little late to the party, calculate how much you could have already saved. Add up your income from previous years, and multiply it by 15 percent. Use past tax returns or create a Social Security account if you don’t know your prior year’s earnings. This will give you a concrete savings goal to make up for lost time in your 401(k).
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