There is a gap between how much money people are saving for retirement and how much they think they will need. However, the average retirement savings goal for Americans has decreased to $1.26 million by 2025, down from $1.46 million the previous year. Despite this drop, many people still have not saved enough to meet this goal. Retirement account balances reached near record highs in 2024, but the volatile stock market in 2025 has impacted many savers. Confidence in retirement prospects has also declined, with more people expecting to outlive their savings. The shift towards relying on retirement savings, rather than pensions, has further decreased confidence in retirement security. Fidelity recommends saving 10 times your earnings by retirement age and following the 4% rule for retirement income. Setting aside 15% of your yearly salary before taxes is also a good starting point for retirement planning. It is advised to meet with a financial advisor to evaluate future income needs and create a strategy for retirement. For those nearing retirement, building an emergency fund, tightening spending, and considering supplemental income sources are important steps to take in preparation for retirement.
Note: The image is for illustrative purposes only and is not the original image of the presented article.
