Retirement savings don't cut it

Jeanne Sadahi, senior writer for CNN/Money stated in a web article on April 4, 2004 the following:

".since 2001, the number of U. S. workers who say they are currently saving for retirement hasn't grown. Only six out of 10 of us are setting aside money for tomorrow.

She cited a recent survey by the Employee Benefit Research Institute (EBRI) and the American Savings Council (ASEC). The survey found that 45 percent of all workers reported total household assets, excluding their homes, of less than $25,000.

Why shrinking savings?

A bear market was eating growth in the stock market.

A lot of us are laboring under the false notion about how much money we need to finance a retirement, which for many of us will not include a company-paid pension with health benefits.

According to the survey, 10 percent of workers think they will need less than 50 percent of their pre-retirement income to live comfortably in their golden years; another 28 percent think they will need somewhere between 50 and 70 percent.

Six out of 10 do not expect their standard of living to decline, while nearly five out of 10 workers who have not saved at all feel at least somewhat confident about their ability to have a comfortable retirement.

Those survey respondents didn't confer with the retirees who took the survey. Thirty-nine percent of them said they are drawing an income that's the same as their pre-retirement income. While 13 percent said their current income is actually higher.

At the very least, retirement experts recommend you plan to live on 70 percent of your pre-retirement income.

Boosting your savings is one of the best ways to feather your nest egg. No matter how well you allocate your portfolio and no matter how fortunate you are in the stock and bond markets, the compounding on a little bit of savings, while impressive, won't yield nearly as much as the compounding on a little bit more.