Americans are reevaluating their retirement goals, with a recent study suggesting a new magic number: $1.46 million, up 53% from 2020. However, financial experts advise against fixating on this figure. Instead, they emphasize the importance of a high savings rate.
According to Rita Assaf, Fidelity’s Vice President of Retirement Products, there’s no one-size-fits-all approach to retirement planning.
Factors like income, desired lifestyle, healthcare costs, and longevity all play crucial roles. Fidelity recommends a personalized retirement plan tailored to individual circumstances.
Americans Rethink Retirement Goals
The key, experts assert, lies in saving diligently and maintaining appropriate asset allocations. Fidelity’s retirement savings framework suggests saving one’s salary by age 30 and gradually increasing to ten times by age 67. While this may vary for each person, the aim is to save 15% of annual income, starting from age 25.
John Roland, a certified financial planner, stresses the significance of consistent savings over high investment returns.
He advocates for gradual increases in savings contributions, citing the book “The Millionaire Next Door,” which highlights the frugal habits of many wealthy individuals.
Roland encourages incremental increases in savings contributions, even if starting with a modest percentage.
The key is to develop a habit of saving and gradually increase the amount over time. This approach, he argues, can lead to substantial wealth accumulation in the long run.
While the $1.46 million retirement goal may seem daunting, experts emphasize that focusing on a high savings rate tailored to individual circumstances is the true path to financial security in retirement.
