Let's start the year off on the right foot by proposing some good news. What if all the dire warnings about the lack of retirement readiness are wrong? "Ridiculous!" you say? With a 2016 study from the Economic Policy Institute (EPI) saying the mean retirement savings is only $5,000 and with Aon-Hewitt's much quoted "85 percent salary replacement ratio," it's easy to see how there might be a retirement crisis.
But if we drill down those numbers, we begin to see a different picture. First, what the EPI really emphasizes is the number of people who haven't saved much for retirement. In other words, the reason why that $5,000 is so low lies in the number of people who have no retirement savings at all. If we only include those who have retirement savings, the mean explodes up to $60,000. Sure that's not much, and neither is the average retirement savings of $95,776 (which, again, includes families with no retirement savings), but it's not exactly nothing. And that "not nothing" is something of an advantage for retirement savers—good news for them at least.
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Christopher Carosa
Chris Carosa has been writing a weekly article and monthly column for BenefitsPRO online and BenefitsPRO Magazine since 2011 and is a nationally recognized award-winning writer, researcher and speaker. He’s written seven books, including From Cradle to Retire: The Child IRA; Hey! What’s My Number? – How to Increase the Odds You Will Retire in Comfort; A Pizza The Action: Everything I Ever Learned About Business I Learned By Working in a Pizza Stand at the Erie County Fair; and the widely acclaimed 401(k) Fiduciary Solutions. Carosa is also Chief Contributing Editor of the authoritative trade journal FiduciaryNews.com and publisher of the Mendon-Honeoye Falls-Lima Sentinel, a weekly community newspaper he founded in 1989. Currently serving as President of the National Society of Newspaper Columnists and with more than 1,000 articles published in various publications, he appears regularly in the national media. A “parallel” entrepreneur, he actively runs a handful of businesses, including a small boutique investment adviser, providing hands-on experience for his writing. A trained astrophysicist, he also holds an MBA and has been designated a Certified Trust and Financial Advisor. Share your thoughts and story ideas with him through Facebook (https://www.facebook.com/christophercarosa/)and Twitter (https://twitter.com/ChrisCarosa).
