If you’re like most Americans, what’s in your wallet isn’t nearly enough to get you through retirement. Not surprisingly, a Well Fargo Retirement Survey found that most of us severely underestimate how much savings are needed for our senior years.
According to the survey, three-fourths of middle-class Americans say they base how much money they’ll need for retirement on “some sort of guess.” And those guesses often appear way off the mark. For example, middle-class Americans surveyed said they believed the median cost of their out-of-pocket health care costs during retirement would be $47,000. In reality, the Center for Retirement Research estimates a typical couple at age 65 can expect to spend $260,000 or more over the rest of their lives.
When asked how much they should withdraw from their retirement savings each year, middle-class Americans said the magic number was 10 percent. Most experts, however, recommend 3 to 4 percent in annual withdrawals.
What’s even more troubling, the survey says that middle-class Americans, on average, have saved only $25,000 for retirement.
My eblasts lately have been pounding home the fact that left to our own resources, most of us, including those who have been injured, have little idea how to manage money for the long term. Many Americans are worried about just meeting day-to-day expenses. This makes setting up a structured payment plan for injured parties that much more critical. With a lifelong income stream, injured parties do not have to guess how much they will have to live on in their later years–they’ll know.
For more details from the survey, go to Wells Fargo Middle Class Retirement Survey.