The majority of Americans don’t know how much money they’ll need in retirement and aren’t saving enough to meet retirement financial goals, a Merrill Lynch Age Wave study finds.
As life expectancy rises, Americans will have to fund their retirements for longer. According to the survey, retirement is the biggest expense in a person’s lifetime with the average cost of retirement over $700,000 or about 2.5 times than that of the average house. The survey finds although people should be saving 25.3 percent of their annual disposable incomes on retirement, people are actually saving 5.5. percent.
As for solving financial woes in the golden years, survey respondents say basic financial management should be a standard course for high schoolers. In response to what should the government do to support the social security system, 39 percent of respondents say the retirement age should be raised, while 32 percent are open to the enforcement of additional private savings, ensuring everyone has a retirement account.
The good news is the study says today’s pre-retirees and retirees are adaptable and hopeful when it comes to financial challenges -- they’re willing to make sacrifices and lifestyle changes to reach their retirement goals.