Are You Guessing About Your Retirement Savings?

There are some things it’s okay to make a “ballpark” guess about. Things like, how much salt to put in a recipe, the time it takes to find a parking space, or how many steps you took yesterday are acceptable guesstimates. Retirement savings is not an area to simply make your best guess. However, according to a new report, the most common way for many people to estimate what they’ll need in retirement is to just guess.

A recent study found that about 40 percent of adults enrolled in retirement plans are simply guessing how much money they’ll need in retirement. This is particularly concerning because these are retirement plan participants or people who are more engaged in retirement planning because they are actively saving for it. Yet they are just guessing how much income they’ll need during their golden years. If people who are concerned about retirement savings enough to participate in a plan are just guessing, what does that say about people who aren’t enrolled in plans?

The report also found that when the participants were asked for their “best guess” of what they’d need in retirement savings, it fell way short of most expert suggestions. The average “best guess” was just $498,000. Meanwhile, most experts advise saving between $1 million and $2 million for retirement. That’s quite a big difference. It shows that “ballpark” guessing on retirement savings is not an optimal strategy.

Do One Thing: Never just guess your retirement savings. Instead, use a retirement calculator or talk to a financial advisor. *Fortera’s Wealth Management Team is here to help you build a strong financial foundation. Providing members with smart, customized retirement solutions, Fortera partners with Osaic Institutions. Our licensed and experienced Financial Planning team, registered representatives of Osaic, offers impartial, thoughtful advice tailored to your unique journey and goals. We're here to help you navigate big life decisions with confidence and get started building a bright future. Visit our Financial Planning page to learn more or give our Wealth Management staff a call at 931.431.3315.

*Fortera’s Wealth Management Team is here to help you work toward a strong financial foundation. Providing members with access to retirement planning solutions offered through Osaic Institutions. The licensed and experienced Financial Professionals of Osaic offer thoughtful guidance designed to help clients understand their options and financial priorities. We’re here to help you navigate important financial decisions and work toward your long-term goals. Visit our Financial Planning page to learn more or give our Wealth Management staff a call at 931.431.3315.

This material is provided for educational purposes only and is not intended as individualized investment advice. Original article by Chris O'Shea and adapted in partnership with SavvyMoney.

*Investment and insurance products and services are offered through Osaic Institutions, Inc., Member FINRA/SIPC. Fortera Wealth Management is a trade name of Fortera Credit Union. Osaic Institutions and Fortera Credit Union are not affiliated. Products and services made available through Osaic Institutions are not insured by the NCUA or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by a credit union or credit union affiliate. These products are subject to investment risk, including the possible loss of value. For more information, please visit http://www.finra.org/ or http://www.sipc.org/. Members should consult a tax advisor for additional tax information.