retirement

Highlights

Financial Security Index Charts Retirement Savings Picture Improves A Tad

Americans have made some headway with their retirement savings after the last few disastrous years. Nearly one-fifth of Americans (18 percent) are saving more for retirement this year than last year, according to Bankrate's August Financial Security Index. When we asked this same question in 2011, 15 percent said they were saving more than the previous year -- not a significant difference.

But the same proportion of people, 18 percent, say they are saving less than they did last year. That's actually much better than last year, when 29 percent of Americans said they were contributing a smaller amount to retirement savings than the previous year.

"The fact that people have stopped saving less is good -- but are they saving enough? The data (are) showing, in aggregate, no," says Certified Financial Planner David Littell, co-director of the New York Life Center of Retirement Income and professor of taxation at The American College in Bryn Mawr, Pa.

The combined retirement income deficit for baby boomers and Generation Xers is estimated to be $4.3 trillion, according to a May 2012 report from the Employee Benefit Research Institute, or EBRI.

Ideally, people would increase retirement contributions every year, but they don't because it's very likely that most people have no idea how expensive 30 years of retirement will be.

According to a March 2012 report from EBRI, 56 percent of workers say they haven't calculated how much they need to save for retirement.

Calculating retirement income needs is the first step to establishing an effective retirement savings rate. It may be higher than you think, particularly if you're older than 30.

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Retirement savings picture improves a tad