Articles for Financial Advisors



The table below shows recommended retirement savings targets as a multiple of annual savings—based on investor’s age and a life expectancy of age 92 (source: Fidelity Investments). For example, Mary is age 60 and earns $100,000 a year. In order to meet basic income needs during retirement, she should save at least $600,000 before retiring (source: National Institute on Retirement Security).


Cumulative Savings Needed For Basic Retirement Income



Savings Target


Savings Target


















Replacement Ratio

According to Georgia State University, a good rule of thumb is a retiree will likely need 85% of his/her pre-retirement income in later life. Surprisingly, only 54% of workers age 55+ say they (or their spouse) have tried to calculate how much will be needed to live comfortably in retirement.


Roughly half of the age 55+ demographic thinks a nest egg of at least $250,000 (excluding home equity or any pension) is needed later in life; < 25% have reached that goal. Of this age group (age 55+), 36% have saved < $10,000 (source: Employee Benefit Research Institute). Surprisingly, jut 5% of workers fund their 401(k) the maximum amount each year. A Vanguard study indicates that only 15% of its retirement plan customers (who were eligible) took advantage of “catch-up” contributions. A 2013 WSJ article states 40% of U.S. households have some type of IRA.


Actual Retirement Age

According to a May 2013 Gallup poll, the average retiree stopped working at age 61, up from age 57 in 1993. The average worker today expects to retire at age 66, up from age 60 in 1995. Gallup also found those age 60 to 69 who work have slightly better emotional health than those who do not work.


Plan To Work

The Employee Benefit Research Institute found 69% of surveyed workers plan to work for pay later in life. Yet only 25% of current retirees have worked for pay. When asked if they expect to have paid employment for as long as needed, 29% of the respondents were “very confident.” However, for those who are actually retired, 7% were “very confident” they could find employment if needed.


The National Retirement Risk Index shows 53% of U.S. households are at risk of not having enough savings to maintain their living standards in retirement. The average life expectancy for a 65-year-old is 19.1 years. According to Fidelity Investments, a 65-year-old couple that retired in 2013 will need $220,000 to cover medical expenses (does not include long-term care) throughout retirement.


The Employee Benefit Research Institute found 23% of workers have obtained professional investment advice (payment by commission or fee); of those who sought such advice, just 41% said they followed most of the advice given.


Nursing Homes

The 2013 national median month charges for assisted living (one bedroom, single occupancy) is $3,450; the median charge for a private room in a nursing home in 2013 was $7,000 a month.


Among the top 20% of earners, Social Security is expected to represent 29% of the worker’s pay during retirement. Fewer than 1-in-3 couples believe either spouse could handle finances if necessary. Although 94% of adults surveyed by Conservation Project think it is important to talk about their own and their loved ones’ wishes for end-of-life care, only 30% have done so.


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