A new report by Ernst & Young says that only 4% of middle-income married couples who don't have a pension and are nearing retirement are likely to have enough money to last their lifetime. Overall, nearly one-third of American households don't have any retirement savings, according to a McKinsey & Co. report. This article from USA Today
discusses how 401(k)s may not be the solution we thought they were for retirement security. If you haven't looked at your balance since the recession started you'll probably see why. Currently, nearly 24% of Americans older than 65 have incomes below the poverty threshold, according to the Organisation for Economic Co-operation and Development. What's shocking is that the United States, Ireland, South Korea and Mexico have the highest old-age poverty rates among the 30 OECD countries. So are 401(k)s the solution? It depends on who you ask. The article offers points on both sides of the argument. So what's the ultimate goal? The article speaks with author Jane White who recommends people who have worked for 20 to 30 years will need to have 10 times their final pay banked to retire securely. To come close to that, you need to start contributing at age 25 and keep contributing for 50 years she says. And they need to have a company match and avoid cashing out any of the savings until retirement, she says. If you haven't thought about your retirement, now's the time.