How much do you think you’ll need to quit your day job?
Nearly half of workers say they will need about $500,000 to retire comfortably, according to an annual survey from the Employee Benefit Research Institute. Problem is, 57% have less than $25,000 stashed away, the survey showed.
Why the big shortfall? Workers claim it’s their cost of living and day-to-day expenses that get in the way of saving more.
But the good news is, a lot of people admitted they could save $25 more a week than they currently are.
“That would make a huge difference in their retirement savings, especially for a young worker,” said Lucas Vandermillen, vice president of retirement services for Principal Financial Group, one of the survey sponsors.
It helps to sit down and calculate how much you’ll really need. But year after year, the survey showed at least half of workers say they’ve never tried to do the calculation.
People tend to spend more time planning their vacations than their retirement, Vandermillen said.
He recommends that workers save about 10% of their earnings over the course of their career.
Despite the lack of savings, people are feeling better about their prospects. Thanks to a rebounding economy, 22% of people surveyed are now confident they will be able to retire comfortably, up from 18% last year, and a record low of 13% in 2013.
The survey polled 1,003 workers age 25 and older and 1,001 retirees.