Illustration by Robert Rodriguez
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Saved Enough?
By George Blooston, September & October 2006
If you need to save more, start now
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When it comes to money, we all want the same thing: enough. But according to a new study from Boston College, the retirement safety net for Americans is sagging, leaving it to individuals to make up the difference.
In a report released in June, the college's Center for Retirement Research announced that a record-high 43 percent of us can't expect to retire at 65 and maintain our living standards. The younger you are, the less likely you are to be on track financially.
The news is even a little bleaker when you consider that Americans on average retire not at 65 but at 63 (men) or 62 (women). Factoring in that reality bumps the number of us whose retirements are "at risk" to a majority—53 percent.
"But the situation is not hopeless," wrote the center's director, Alicia H. Munnell, and her coauthors. "If people choose to work longer—even just two years—and save 3 percent more, they can substantially improve the outlook for their retirement security."
If the average retirement age crept up to 67, the authors calculated, those at risk would drop to 32 percent, a level not seen since the 1980s.
To find out if you're saving enough, consult the Retirement Calculator in the financial Toolkit at AARP the Bulletin Online. Use between 3 and 4 percent as an inflation rate.
If, like most Americans, you should save more, the key is to start now. For advice on money management, see AARP.org's Financial Planning and Retirement channel, where you can create a household budget, evaluate your cash flow, review the five principles of good investing endorsed by AARP, or learn the questions that you need to ask before hiring any financial professional.
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