Despite recent gains, older Americans still aren’t saving enough for a comfortable retirement, according to a new survey from Interest.com. There’s a personal finance rule of thumb that says seniors need at least 70 percent of their pre-retirement income once they quit working.
In 2013, seniors in only two places met that threshold: Nevada and Washington D.C.
Mike Sante, managing editor of Interest.com, says many federal workers in the District of Columbia retire with government pensions. Nevada may be harder to explain, but he suspects the predominance of union workers in Las Vegas may be part of the reason.
“Union membership tends to mean that they still have traditional retirement plans,” says Sante.
American seniors are inching closer to meeting that retirement “rule of thumb,” however. They now earn close to 60 percent of pre-retirement income.
Americans 65 and over earn about 60 percent of what pre-retirement Americans ages 45-64 earn. That’s a 10 percent jump from 2005.
Sante contends those gains are partly due to the fact that more seniors are staying on the job longer. Many can’t afford to retire at age 65.
Sante says the survey is aimed not at seniors but “everybody who’s working in their 30s, 40s and 50s.”
He says, “When you’re still in your 30s and 40s, even in your 50s, you can still save a significant amount of money and have a big impact on your quality of life after you stop working.”
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?