Think a million dollars is enough to get you through retirement? Think again.
New research from Scottrade Advisor Services show most (71 percent) registered investment advisors put a much higher price tag on the cost of retirement–much higher than what most Americans perceive is going to be enough.
"While there are no definitive answers on how much money various generations will need to save for retirement, it is clear that the majority of RIAs feel the $1 million goal is not enough for most families," said Craig Hogan, Scottrade director of customer intelligence, customer relationship management and reporting, in a released statement. "According to the majority of RIAs, younger generations, especially, need to set their retirement goals higher than other generations and start saving as early as possible. This can be attributed to a variety of factors, including the uncertain future of Social Security."
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So how much does the typical family need to save for retirement? This question was broken down by generations to determine RIAs' opinions on average investment goals, in today's dollars, for varying ages:
Generation Y (ages 18 – 26):
The recommended goals are the greatest for Generation Y. More than three-quarters (77 percent) of advisors suggest a goal of at least $2 million, and more than 40 percent believe that Generation Y should be targeting more than $3 million in retirement funds.
Generation X (ages 27 – 42):
RIAs also suggest loftier goals for Generation X. About half of RIAs (46 percent) believe Generation X should at least double the $1 million goal and save between $2 and $3 million. Twenty-two percent suggest an even higher amount – a goal of more than $3 million.
Boomers (ages 43 – 64):
For Boomers, thirty-five percent of RIAs felt Boomers need between $2 million and $3 million to retire, and 13 percent believe Boomers need more than $3 million. Thirty percent recommend a retirement goal between $1.5 million and $2 million.
Seniors (ages 65+):
Seniors are the only generation that may come close to only needing $1 million for retirement. Forty-four percent of RIAs answered that $500,000 to $1.5 million is sufficient for average seniors. Only 20 percent of RIAs believe seniors need between $2 and $3 million.
The 2009 Registered Investment Advisor Study commissioned by Scottrade Advisor Services polled 226 registered investment advisors in a proprietary online survey from August 12 through September 30, 2009
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