It’s easy to understand why your employees might be clueless as to how much money they’ll really need to lie comfortably in retirement. With so many different formulas out there, which one is correct? Eight times their final pay? Twelve times?? Or how about 20-25 times that final salary??!!
The truth is there isn’t a single formula that works for everyone. What’s more important is to consider each individual’s needs and the challenges they expect to face in retirement. Examples include:
- Lifestyle – What standard of living do they hope to maintain?
- Health care – Employees with health issues should expect to need a higher final balance.
- Life span – Does longevity run in the family?
- Long-term care – Expenses like assisted living facilities or in-home care can add up quickly.
- Family assistance – Retirees with family nearby to help out can anticipate paying less for care.
Given these criteria, it’s estimated that about half of today’s workers aren’t saving enough (a recommended 12-15{d044ab8acbff62f209a116f8142e303cb886f535b0fcf58cb82cde7cb327d3c9} of their annual income) to meet their basic needs in retirement, without significantly reducing their standard of living. How are your employees doing in this area?
Read more on this topic by clicking here.