Whether your monthly bills leave little leftover cash or you’re focusing on other goals, you might find yourself among the many Americans who need to catch up on their retirement savings. If you’re still far away from retirement age, you may feel no pressure to contribute much yet. But these six retirement statistics that the financial guru Dave Ramsey shared on his blog could make you think twice.
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Ramsey explained that 54% of American workers didn’t even know their retirement savings needs. This makes planning how much to contribute regularly and tracking your progress very challenging.
Many factors play a role in your savings needs, including your retirement age, intended lifestyle, cost of living, inflation, income sources and healthcare costs. You can use an online calculator, such as this one from the AARP, or speak to a retirement advisor to find out.
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If you expect to live off your monthly Social Security payments, you might be surprised that the average monthly payment was just $1,907 in January 2024. The Social Security Administration also mentioned the payments are made to only cover 40% of what you had earned while working.
Since this likely won’t cover your costs, having sufficient retirement savings is crucial for your financial security. Plus, don’t forget potential changes to Social Security that could negatively affect your benefit amount.
A 2023 report from Ramsey Solutions showed that 34% hadn’t saved any money at all. This not only includes money for retirement but also an emergency fund and savings for other goals. In addition to causing financial struggles during retirement, having no savings to handle today’s emergencies is dangerous and could lead to debt.
Regularly putting monthly income toward these purposes pays off and provides financial security. You might set some initial goals of putting aside at least three months of expenses toward emergencies and 15% of your earnings toward retirement.
Ramsey mentioned that 39% of Americans didn’t invest in stocks, which tend to have the best average returns among investments. Some investors might not feel comfortable with the higher volatility that comes with these investments and choose safer, less profitable options instead.
