Retirement and Transition Plans

How much do you need to retire?

The following information can help you plan for life after running your small business.

Published: August 21, 2015
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How much do you need to retire?

Preparing for life after work is difficult for many Americans: About 70% of 30- to 64-year-olds worry about not having enough money for retirement.1 The following information can help you plan for life after running your small business.

Retirement confidence

Sixty-seven percent of retirees are very or somewhat confident they have enough money to live comfortably in retirement versus 55 percent of current workers.

Saving sooner

Seventy-two percent of middle-class Americans say they should have started saving earlier for retirement.

Top five reasons worker don't save for retirement:

  1. Can’t afford it due to the cost of living and day-to-day expenses (53 percent)
  2. Currently unemployed or underemployed (14 percent)
  3. Paying off debt other than a mortgage (6 percent)
  4. Paying off a mortgage or other housing expenses (5 percent)
  5. Education expenses (5 percent)

Choosing a retirement plan

Retirees with plans save significantly more. However, only 36% of business owners have IRAs, only 18% participate in 401(k)s, and fewer than 2% own other qualified plans. While some expenses may dwindle in retirement, other expenses, such as travel and medical care, can increase significantly.

Calculating annual income

Only 44% of workers have ever calculated how much they’ll need for a comfortable retirement. The IRS estimates you might need up to 80% of your current annual income to retire comfortably, but that percentage will depend on the value of your assets and the income you can count on in retirement.

Top five major sources of income reported by retirees:

  • Social security (62 percent)
  • Pension (36 percent)
  • Employee retirement plan (19 percent)
  • Personal savings and investment (15 percent)
  • IRA (15 percent)
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