If you are anything like the average American — and the odds suggest that you just might be — you are woefully underprepared for retirement. A June 2013 report from the National Institute on Retirement Security highlights some the relevant data: the average working-age household has a retirement account balance of just $3,000; the collective retirement savings gap among working households aged 25-64 is between $6.8 and $14 trillion (depending on targets and measures); and as many as 48 million working-age households (45 percent of the total) do not own any retirement account assets.
If you are savvy with your personal finances and have managed to squirrel away some dollars in a 401K or an IRA over the years, you are in a better position than many, but the data suggests that you are still underprepared. At 4.8 percent as of October 2013, the personal savings rate in the United States is well below the 10 to 15 percent range that experts recommend to ensure retirement savings targets are met.
This data may be alarming — or you may already be familiar with the cries of crisis, given that they are plastered all over the financial media — but the first step to solving any problem is recognizing that there is one. The data indicates that the situation is dire, and if you want to avoid participating in what many believe will be (or already is) a crisis, you will have to take action. We spoke with Dave Littell, RICP Retirement Income Program Director at The American College, about the things that Americans can do to help prepare them for retirement. Here are a few resolutions to consider taking for the New Year to get started.