About 50 percent of boomers aged 55 to 63 have saved less than $500,000 for retirement. Most believe they’ll need $2 million.
Still, 30 percent of boomer respondents to a recent Charles Schwab survey used the word “contentment” when describing their preparedness for retirement and 52 percent said they’ll make up the $1.5 million gap by retiring later.
Schwab says the average respondent was 60 years old, has $500,000 in savings and thinks they need approximately $2 million for retirement (presuming they want to spend $100,000 in retirement per year and are saving $15,000 annually), and would like to retire at 65.
What are their options? According to Schwab, “If delaying retirement was the only lever they’d be willing to pull, their options would be: putting off retirement by 11 years, saving almost $200,000 per year, or cutting their expenses in half. If they’d be willing to pull several levers – such as reducing retirement spending to $80,000 and increase their savings an additional $15 thousand a year, they would only have to reduce their retirement by six years.”