As of September 30, 2017, how much money did Americans have in their (401)k accounts? Cue Final Jeopardy Music…what is $5.3 trillion?
Same date, what was the median balance in those 401(k) accounts? The median is the value in the middle of the distribution and is not the same as the mean, or average. The answer is $24,713.
That last fact is disturbing. Most financial advisors recommend withdrawing 3-4% of your retirement account each year while in retirement. That figure is calculated so it is not likely a person will outlive their money. Three to four percent of $24,713 is $741-$989 a year. Do you know anyone who can live on that?
Yes, I realize that many people have assets outside of their 401(k). Still, the truth is many Americans don’t plan. You know the old saying, no one plans to fail they just fail to plan.