A grand total of $1.7 million: That’s how much Americans believe they should save in order to retire, according to a Charles Schwab survey of 1,000 401(k) plan participants between the ages of 25 and 70. Unfortunately, the survey also found that few are likely to attain that goal.
Almost 60 percent of survey respondents said their 401(k) plan was their only or largest source of retirement savings, but 51 percent are contributing less than 10 percent of their salary to their 401(k), with the average annual contribution totaling $8,788. Only 23 percent of respondents reported contributing the maximum allowed in their 401(k) plans, which is $19,000 for employees under 50 and $25,000 for those 50 and older.
Schwab found that if employees start saving at age 45, they need to invest as much as 35 percent of their salary to reach that goal, but if they start saving in their 20s, they need a 10 percent to 15 percent salary contribution. But one-third of auto-enrollees reported they never increased their contribution level.
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