Nearly one-third, 28%, of people have nothing saved for retirement, a GOBankingRates survey of 1,000 adults found.
“The statistic that 30% of Americans have $0 saved for retirement is alarming, but not surprising,” says retirement planning adviser Mike Kojonen of Principal Preservation Services in Minneapolis. “Through countless consultations, I’ve observed a prevalent lack of awareness about the cost of retirement and a significant underestimation of how much needs to be saved.”
The lack of preparation is surprising, given the fact that 80% of the population thinks it takes a bundle of cash to be able to afford to retire. Twenty-five percent think they can retire on less than $500,000, and another 25% think it’ll cost between $500,000 and $1 million.Why are so many people ill-prepared for retirement?
Even when they are lucky enough to be offered a 401 plan, 39% don’t participate, according to the GOBankingRates survey. If they do contribute, it’s hardly enough; 13% contributes 1% to 3% of their salary, and 13% contributes 4% to 6%. The dismal retirement outlook for so many “highlights a widespread financial literacy gap and underscores many challenges in balancing immediate financial needs with long-term savings goals,” says Edward Piazza, president of Titan Funding in Boca Raton, Florida.
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