How big is your retirement nest egg compared with most people's? Only 14% of workers have $250,000 or more saved for retirement, according to a new survey by the Employee Benefit Research Institute and Greenwald & Associates.
The other 86% of workers who were queried have smaller amounts of retirement savings. Thirty-eight percent have less than $50,000.
The good news, slim as it is, is that the percent who have at least $250,000 rises to 20% among workers who have a retirement plan. Among workers with no plan, just 1% have $250,000 or more in savings.
The survey questioned workers age 25 and older.
Not surprisingly, older workers tend to be more successful investors, with greater savings. Less than 4% of workers age 25 to 34 have savings of $250,000 or more. In contrast, 23% of workers age 45 and older have reached that threshold of retirement savings.
Among all workers, the 14% with at least $250,000 generally has been increasing - just 11% had that much in 2014. That was down from the 12% who had saved that much in 2013. The portions with that much savings were 11%, 10% and 10% in 2010, 2011 and 2012.
Savings amounts often appear to be based more on seat-of-the-pants decisions than careful planning or analysis of stock market news and opportunities.
Cost of living and day-to-day expenses head the list of reasons why workers do not save more for retirement, with 50% of workers citing those factors in the survey.
But many workers say they could save a small amount more. Nearly 7 in 10, or 69%, said they could save $25 a week more than they are currently saving for retirement.
And 51% of workers said their level of debt keeps them from saving more. The types of debt most frequently reported are mortgages, credit card debt and car loans. That 51% was down from 58% in 2014.
With such a relatively small percentage of people having more than $250,000, being able to save $1 million in retirement funds seems nearly impossible, yet it can be done. Next week’s blog will show you how 401(k) millionaires accomplished it.