How much do you need to retire If you ask financial advisors, you’ll get lots of different answers. Individuals have their own thoughts as well. Do you need $250K? $500K? $1 million? $2 million? More The majority of Americans think they will need less than $1 million, according to the Merrill Edge Report Fall 2016. But 19 percent have no idea how much they will need.
- 9 percent think they will need more than $2 million
- 14 percent believe they will need $1 million to $2 million
- 24 percent say $500,000 to $1 million
- 23 percent say $100,000 to $500,000
- 9 percent say $0 to $100,000
- And 19 percent say they just don’t know
Recently I mentioned my friend’s approach. I like this. It’s easy for most people… My friend Doug Massey created a an easy formula to estimate whether you have enough money to retire. Here’s the formula:
Age * Net Worth / Annual Expenses
If the result from this formula exceeds 1,000, you have enough money to retire.
source: Income Investors
The survey found that lower-income adults were more likely going to have a tough time saving money. Of those earning less than $50,000, over one-third, or 38%, have nothing savinged. Another 35% have less than $1,000 saved.
Women and Millennials particularly appear to be falling behind. The survey found that 42% of women have no money set aside in a savings account, compared with only 28% of men. Of young Millennials — those between 18 and 24 years old — almost three-quarters, or 72%, have less than $1,000 in their savings accounts and 31% have nothing saved at all.
USA savings rate