Retirement Savings: A Matter of Urgency

David Poole, the head of Citigold North America at Citibank, is deeply concerned about the impact of delayed retirement savings on individuals’ financial well-being. In a recent interview, Poole emphasized that every year of delay in saving for retirement is equivalent to losing one less year of compound growth, ultimately resulting in a significant reduction in the amount of money available for retirement.

The consequences of delaying retirement savings are far-reaching and can have a profound impact on one’s financial security in old age. According to Poole, for every 10 years that an individual delays saving for retirement, they may need to save three times as much each month to catch up. This highlights the importance of starting to save early and consistently for retirement.

With the average age of retirement around 64 years for men and 62 for women, individuals may need to support themselves financially for 30 years or more in retirement. The average American believes they’ll need approximately $1.46 million to retire comfortably, according to a 2026 Planning & Progress Study by Northwestern Mutual. However, nearly half (48%) of Americans believe it’s somewhat or very likely they’ll outlive their savings.

While the study found that 46% of Americans don’t expect to be financially prepared when it comes time to retire, 36% haven’t taken any steps to address this issue. The median savings for someone aged 55 to 64 is just $185,000, and those aged 65 to 74 have $200,000, according to the Fed’s most recent Survey of Consumer Finances.

There’s no magic number for retirement that works for everyone, and a better approach is to build a personalized financial plan based on one’s goals and timelines. To determine how much one will need to save to meet their goals, there are several rules of thumb, such as the 25x rule and the 80% rule. Fidelity recommends saving three times one’s pre-retirement salary by age 40, six times by age 50, eight times by age 60, and 10 times by age 67.

Ultimately, having a strategy that’s built around one’s own goals and making adjustments as life, priorities, and financial circumstances evolve is key. This involves automating contributions to retirement savings plans, increasing those contributions as income increases, taking advantage of employer matches, and making catch-up contributions after age 50.

It’s never too late to start saving for retirement, though one may need to adjust their strategy. This could mean saving more aggressively, delaying retirement, or thinking carefully about when to claim Social Security. Four in 10 (41%) Americans are planning to work or are currently working during their retirement years, according to the Northwestern Mutual study.

While the idea of working in retirement may not be appealing to everyone, it’s a reality for many. According to the study, 47% of Americans plan to work in retirement because they’ll need the additional income, and 56% want to continue feeling useful and stimulated. By having a personalized financial plan and adjusting it as needed, individuals can ensure a more secure financial future in retirement.