Most Americans aren’t primed for early retirement, discovered a recent Financebuzz survey of 1,000 adults. Many aren’t sure how much they actually need to save to retire in general. However, the survey found that respondents were willing to make some major sacrifices in order to retire 10 years earlier.
Retirement is complicated: one in three Americans has less than $5,000 in retirement savings, with one in five reporting no retirement savings at all, according to a 2018 Northwestern Mutual survey.
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Moreover, “the mechanisms intended to gird Americans retiring now are already under considerable strain,” said a recent article on Knowledge @ Wharton. “Social Security is inadequately funded; defined benefit pension plans have all but disappeared; and the government’s insurance program meant to take over for failed defined benefit pension plans is itself under-capitalized.”
Still, who doesn’t want to FIRE (Financial Independence, Retire Early)?
Few are sure how much they need to retire
Most respondents had a long way to go to retire, much less FIRE. Close to 30% admitted they had “no idea what they’ll need.” Another 45% shrugged that they had only a “vague idea” but hadn’t yet “done the math.”
Just one in four said they had a “strong understanding” of how much money they’ll need to retire.
What would people give up to retire 10 years early?
Here are a few; see the chart for more.
- Over a third said they’d go two years without buying anything new (except essentials like groceries).
- Another third were willing to turn up the heat on work, taking a second or even third job if it meant they could retire early.
- 12% of respondents said wouldn’t have children.
- 11% said they’d give up their pets. (Hey, pets aren’t that expensive!)
- Only 6% said they’d give up their car.
Scrimping and saving aside, however, the average age of retirement is 63, according to the U.S. Census Bureau. So have those kids after all, and consider the rest of the belt-tightening moves just savings to add to your retirement account.
Because there will be many setbacks in the quest towards retirement: respondents cited student-loan debt, credit-card debt, healthcare costs, not making enough, housing and kids expenses, and more.
But if you can jump over those squares in the game of Life and get to retirement, whether sooner or later, you’re set. Here’s to the good life!