I hope you’re not among the 51% of Americans who don’t have a large enough nest egg to support their retirement needs.
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Like me, I think most working Americans are looking forward to retirement. It’s what I call “priority” time, time when I can do what I want instead of what I have to do to put food on the table or turn on the lights.
But as a recent Motley Fool research report on Americans’ retirement readiness reveals, millions of us are getting closer to retirement every day, and the stakes are high. Let’s take a look at some of the findings here. This may help you understand: you When the time comes, you’ll be ready to retire.
Millions of people are not ready for retirement
The Fool report begins with the following depressing news: “47% of working households are at risk of not having sufficient retirement savings, according to an analysis by the Boston University Retirement Research Center.” “The median retirement account value in 2023 was $87,000,” he added.
These numbers appear to be consistent with the following findings from the 2025 Retirement Confidence Survey:
Source: 2025 Retirement Confidence Survey. Calculations do not include the value of the primary residence
look? 51% of workers have less than $100,000 and 32% have less than $25,000. Such a low amount may be fine for workers in their 20s and 30s, but by the time you’re in your 40s or 50s, your retirement savings program should be on track and ideally you should have a larger nest egg growing.
How much money do you need for retirement?
So, how much? should Knock your socks off? There’s no one answer that fits everyone, but the flawed but still useful “4% rule” can help you get an idea. This suggests that retirees can withdraw 4% from their nest egg in their first year of retirement and then adjust the withdrawal amount each year thereafter for inflation. The table below shows how much you can withdraw in your first year of retirement with nest eggs of various sizes.
Source: Author’s calculations.
Clearly, people with $250,000 in their nest egg and soon to retire are in trouble. That $10,000 withdrawal likely won’t last long, even with Social Security benefits averaging about $2,008 a month as of August (the equivalent of about $24,000 a year).
It’s worth taking the time to think realistically about how much income you’ll need in retirement and how you’ll get it. To get started, here’s a list of possible spending categories:
- groceries
- Eating out
- clothing
- health care
- transportation
- insurance
- public works
- entertainment
- education
- trip
- gift
- charitable donation
- membership
- Household expenses, maintenance costs, repair costs
- tax
What can you do to plan for retirement?
So what can you do, especially if you’re stuck saving for retirement?Here are some ideas.
- Save aggressively and invest effectively through options such as regular taxable brokerage accounts, 401(k)s, and/or IRAs (such as S&P 500 index funds).
- If possible, consider working for a few more years. Delaying retirement shortens the lifespan of your nest egg, allowing you to build it up further before retirement. You may also be able to stay enrolled in your employer-sponsored health insurance plan for a longer period of time, potentially saving you money.
- If possible, consider delaying claiming Social Security until age 70. This won’t work if you simply need the income quickly, but for most people, age 70 is the best age to claim benefits to get the most out of them.
- Perhaps you’ll work part-time for the first few years after you retire, or you might take up a side hustle, like making and selling things or giving music or language lessons.
- Think outside the box. If you need more income in retirement, you might consider taking up a border or taking a reverse mortgage.
Even if you’re one of the millions of Americans who aren’t ready for retirement, know that all is not lost. There may still be time to improve your financial situation.
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