$1.8 Million Is The Amount That An Average American Needs At The Time Of Retirement
With the increase in the price of everything else, the cost of retirement has also risen. The average American believes that one needs $1.8 million at the time of retirement, as per the data released by the Schwab survey. The amount was $1.7 million last year. The survey took the raw data between 19th April to 2nd May from 1000 US 401(k) plan participants.
According to Schwab, only 37% of the participant workers think that they will achieve this target. This value was down by 10%, as compared to the last year.
Schwab said, according to USAToday.com,
“High inflation has been the biggest obstacle for savers, even though inflation eased in June to 3% from a 40-year peak of 9.1% a year ago. Sixty-two percent of workers see inflation as an obstacle to saving for a comfortable retirement, up from 45% last year.”
It is true that saving $1.8 million for an average worker in this inflation is highly unlikely. The Employee Benefit Research Institute’s wealth benefit director, Craig Copeland added –
“The current economic climate, in particular inflation, is eroding the confidence that Americans had in their retirement preparations going into the pandemic.”
As per many experts, saving $1.8 million is pretty hard for an ordinary American to save for retirement, given the current condition of the economy. Employees need to be very creative with their budget, live a life of fewer needs, and practice spending less to get to this amount at the time of retirement.
However, other experts say that it is fine if you don’t save $1.8 million. You can save lesser amounts and still live a simple life. It essentially boils down to the needs and lifestyle of the individual.
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