$1 million is OK only for those retiring now at age 65.
By Raif Karerat
WASHINGTON, DC: Most people believe the average person needs to save one million dollars for retirement. However, David Marotta, president of Marotta Wealth Management in Charlottesville, Va., recently noted in an article published by the National Association of Personal Financial Advisors that a 20-year-old in 2015 may have to amass up to $7 million to retire comfortably.
“Someone retiring now in 2014 with $1 million at age 65 can safely withdraw $43,600 a year,” Marotta wrote last May. “However, [because of inflation], today’s 20-year-olds will need over $7 million to have that same lifestyle when they retire. In 1970, they would only have needed $166,000 in retirement to have a similar purchasing power for the rest of their life.”
Further clouding the future of many Americans is a survey titled, “Preparing for Retirement in America,” which found only 65 percent of workers have any savings for retirement at all, a significant drop from the 75 percent reported in 2009.
The survey, commissioned by the Employee Benefit Research Institute along with Greenwald and Associates, also revealed 24 percent of workers saved less than $1,000 for retirement, and 6 in 10 Americans say their financial planning needs improvement.
Furthermore, 34 percent attest they have made no effort at all to saving anything or make a retirement plan, but most say that they intend to start saving at some point.
“Intending one thing and doing another is human, but it’s an impulse we should all fight hard to resist,” Rebekah Barsch, vice president of planning and sales at Northwestern Mutual, said in a press release. “Intentions only get us so far. And when the stakes are high, it’s taking action that’s critical.”