• 52% of Americans have less than $10,000 in retirement savings¹.
• The largest number of Americans (25%) only contribute approximately 6 %- 10%¹.
• 5% or less is contributed by the next largest group (21%)¹.
• Experts say your retirement income should be approximately 80% of your final pre-retirement salary²

So, why do Americans have so little in their retirement savings/investments? One reason is that the average American carries approximately $6,000 in credit card balances, and depending on the state you live in it could be higher or lower³. Another reason is that the average car payment for a new vehicle is $530 and on a used car it’s $380⁴. Housing payments are another contributing factor. The average mortgage payment is approximately $1,500 per month and the average rent runs about $1,480 per month⁵. Food (12.5%), Personal Insurance & Pensions (12%), Healthcare (8%), Entertainment (5%), Cash Contributions (3.5%), Clothing & Services (3%), Everything Else (7%) utilize much of the remainder of ones income⁶.

Experts recommend investing 15% or your gross household income into retirement⁷. But, with the aforementioned percentage listed for how much the average American saves/invests into their retirement, most are nowhere near saving enough towards their retirement. Unfortunately, too many Americans are looking to Social Security and Medicare as their retirement strategy. Many others plan to work until they’re no longer physically able to work.

Another contributing factor is a large percentage of people either don’t use a budget, their budget is upside down or they don’t follow the budget they’ve created for themselves. Because this saving/investing for retirement is looked at as an expense if I have enough money left over to do it. This is pretty much the same philosophy people use for tithing and charitable giving.

On top of all of this, many people either don’t trust the stock market because of its volatility or a lack of knowledge how to do it. Many feel the stock market is this big scary thing that only the “truly rich” understand and can invest in. Fortunately, that is not the case. Gaining the right knowledge isn’t as hard as one may think. The trick is to find an investment professional with the heart of a teacher, who wants to educate you on different investments before you decide to invest any money into them.

With all of these reasons then, what’s the answer to changing the statistics and everyone being able to invest the recommended 15% of their household income for their retirement? The answers are:

• Bring your spending under control with the use of a Zero-based Budget
• Pay off all consumer debt
• Establish a Fully Funded Emergency Fund (So you’re prepared for the inevitable emergency)
• Find a investment advisor with the heart of a teacher
• Learn from the investment advisor and begin investing 15% into your retirement savings
• Payoff your mortgage (so you’ll be able to contribute more than the 15% to your retirement)

Several people will look at that list and find it daunting because a lot of people have never heard of some of it and others are unsure of how to implement them. Fortunately, they’re not hard to apply. You can search on the internet about them and how do them. But, the internet can have too much information for someone whose never looked into such things that they become overwhelmed.

Another way is to take a course like Financial Peace University where you can begin to get a better understanding of what those things are and how to do them. In addition, you can read books or watch videos on the subject. Though, caution is advised with books and videos because one can become overwhelmed by the amount of each of them that’s available.

For those who don’t have the knowledge and feel overwhelmed by their situation and those who have some knowledge, but can’t seem to be able to make traction progressing towards their goals, financial coaching is a excellent option to help them get started or move beyond wherever they’re stuck. Not sure what financial coaching is and how it can be a valuable resource, you can find out more about the value of financial coaching at https://ramseycoachcomtaketwofinancialcoaching.wordpress.com/2020/12/19/money-dos-donts-the-value-of-a-financial-coach/. You can also check out my website at https://ramseycoach.com/taketwofinancialcoaching.

When you’re ready to make a change and prepare for a more confident retirement, I offer free consultations so we can discuss your current situation, your goals for yours and your family’s future, learn alternative ways to what you’ve been doing, and any pain points or problems you’re currently experiencing. From there we can talk about creating a plan to help you have a more comfortable and positive retirement expectation.

Now that you’ve finished reading this blog and are thinking more about your retirement, what are some questions or issues you’d like to know more about? Please enter them in the Comments section, and I will answer them for you. Should not want to share them in a public forum, you can email your questions and concerns to mailto:taketwofinancialcoaching@gmail.

I hope today’s blog was encouraging to you and provided information to help you and others better handle their financial matters. My purpose through these blogs is to inform the reader about money and financial issues so that we all can become better managers of our assets. If you like what you read, make sure to sign up so you can receive my weekly posts. The goal of Take Two Financial Coaching is to provide the necessary information to help families and individuals break the chains of debt, build lasting wealth, and become outrageously generous.

For those who are tired of being in the rat race or just want to better manage what they earn, I am available to have a Free 60 Minute Conversation to discuss your situation and how I can help you change it. Go to my calendar at https://ramseycoach.com/taketwofinancialcoaching to arrange a time that works for you. You can also email me at taketwofinancialcoaching@gmail.

Credits

¹ https://www.cnbc.com/2018/03/15/bankrate-65-percent-of-americans-save-little-or-nothing.html

² https://www.investopedia.com/retirement/how-much-you-should-have-saved-age/

³ https://www.cnbc.com/select/average-credit-card-balance-by-state/

⁴ https://www.nerdwallet.com/article/loans/auto-loans/average-monthly-car-payment

⁵ https://themortgagereports.com/60547/average-mortgage-payments-level-out-with-average-rent

⁶ https://www.fool.com/slideshow/9-most-common-ways-americans-spend-their-money/?slide=11

⁷ https://www.daveramsey.com/blog/retire-a-millionaire-on-35-a-week