It's what most of us work our entire lives for -- the day when we can step off the treadmill and leave the traffic jams and long work days behind.
Some envision it as a time to finally take that trip to Europe. Others figure they'll learn Italian or crank out that first novel they've been planning.
It all sounds great, but here's the rub: The average working household has virtually no retirement savings. In fact, when all households are included -- not just those with retirement accounts -- the median retirement account balance for all working-age households is just $3,000, according to the National Institute on Retirement Security.
The institute's report, "The Retirement Savings Crisis: Is It Worse Than We Think?" also reveals that near-retirement households aren't faring much better. Their median retirement account balance is $12,000.
Two-thirds of working households age 55 to 64 with at least one earner have retirement savings less than one times their annual income -- far below what they will need to maintain their standard of living in retirement.
All told, working households are collectively $6.8 trillion to $14 trillion short of target retirement savings, the study said.
Those numbers don't surprise George Ciceri, owner of JC Financial Planning & Investments LLC in Long Beach.
"Many people are underestimating what kind of savings they'll have to put into their accounts," Ciceri said. "The relevant question should be, 'How can I maximize my contribution every month to get to my goal?' They are underestimating what they're going to need."
Needless to say, millions of Americans are concerned about their retirement security -- and for good reason.
Private sector employers have shifted away from traditional defined-benefit pensions, which provide a stable source of income that lasts through retirement and are managed by professionals.
Instead, most private sector employees with workplace retirement plans must now rely on defined-contribution, individual-investment accounts, such as 401(k) plans. And those were designed to supplement -- rather than replace -- defined-benefit pensions.
Now the risk and much of the funding burden falls on employees, who often have difficulty contributing enough on their own and who typically lack investment expertise.
"Up until about 10 years ago it was very common for big corporations to have pension plans," Ciceri said. "But those defined pension plans pretty much got wiped out. Today it's mostly government workers that have those kinds of plans. The big corporations have changed to 401(k) plans."
The problem, according to Ciceri, is that many workers are not sinking nearly enough into those savings plans.
"A lot of investment portfolios got wiped out after 2008 and 2009 and many middle-class people are living paycheck to paycheck," he said. "They're only putting $100 to $200 a month into their 401(k). People are more and more open to the suggestion that early retirement at age 55 is probably not the smart way to go. Now they're thinking that maybe they'll work as long as they can."
Luanne Lynch is among that group. The 56-year-old San Gabriel resident had been working for Lender Processing Services in Pasadena but was laid off from that job in March.
"It was a staff reduction," she said. "The company is based in Jacksonville, Fla., and they transferred my job back there. Now it looks like I'll be working well into my 70s. I've been working mostly in the mortgage industry since 2001, and I've been laid off several times. It's frustrating."
Her retirement savings have eroded as a result.
Lynch said her balance still exceeds the $12,000 median balance for near-retirement households. But all of those layoffs have forced her to dip into her retirement fund, she said.
Independent retirement adviser Gary Marriage Jr., CEO of Nature Coast Financial Advisors in Florida, warns that many retirees are receiving less than they are due from Social Security because they don't know the rules and the true financial impacts.
Many are eager to retire as early as possible and others fear Social Security retirement benefits will suddenly vanish, so they want to get what they can as quickly as possible -- at age 62.
But if you're counting on those benefits as part of your income, you should wait until you're eligible for the full amount, Marriage said. That's age 66 if you were born from 1943 to 1954, and age 67 if you were born in 1960 or later.
If you're in the older group, retiring at 62 cuts your benefits by a quarter. For the younger group, it's nearly a third.
"Chances are, you'll be better off mentally and physically if you wait anyway," Marriage said. "Many studies show that people live longer and are more vital the longer they remain employed."
The average monthly retirement benefit in June of this year was $1,222.43, according to the Social Security Administration. People born in the 1943 to 1954 group who are eligible for that amount at age 66 will get just $916.82 a month if they retire at 62.
If they live to age 90, that's a total of $308,052. By waiting just four years, they'll net an additional $44,007.
The Federal Reserve's drive to keep interest rates low has also eaten into investors' portfolios.
"If you have CDs, bonds or treasuries you're only getting 1 to 2 percent at best," Ciceri said. "A lot of people are struggling with the idea of how much additional risk they are willing to take on, given that interest rates are so low."
The typical working American household needs to replace roughly 85 percent of its pre-retirement income to maintain its current standard of living in retirement, according to the NIRS report. That rate probably seems high to many. But it doesn't even account for medical costs, which can escalate rapidly during retirement.
"The hope of retirement security is out of reach for many Americans in the face of a crumbling retirement infrastructure," the NIRS report concluded. "The 'American Dream' of retiring after a lifetime of work will be long delayed, if not impossible, for many."
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