More deposits are required! The latest survey in the United States shows that a person needs to prepare 1.25 million US dollars, which is about NT$40 million, to enjoy retirement life and pay all expenses. In recent years, due to rising prices and inflation, the demand for savings has increased by 20% compared with last year.
Taipei, Taiwan (Business Northeast) – How much money is enough to pay for old age? CNBC, a well-known financial news channel in the United States and Canada, pointed out that the latest survey in 2022 shows that based on the current price level in the USA, a person needs to prepare 1.25 million US dollars, which is about NT$40 million, to enjoy retirement life and all payment with peace of mind. Due to rising prices and inflation in recent years, the amount has increased by 20% compared to last year.
According to the Ideal retirement preparedness survey released by Northwestern Mutual, an American financial services company, the ideal retirement preparation amount in the minds of more than 2,300 American adults interviewed increased by 20% compared with last year. In 2021, it was $1.05 million, and this year it increased by $200,000 to $1.25 million.
Affected by COVID-19, climate change, and the Russian-Ukrainian war, prices have risen steadily in the past two years, and inflation has been very serious. The US inflation rate reached 7.9% in February this year, breaking a 40-year record. In June, the annual growth rate of CPI reached 9.1%, a new high. Gasoline, housing costs, and food prices rose the most, and the cost of living increased considerably.
For the working group with a monthly salary, the continued increase in living expenses has seriously affected their retirement planning, and nearly half of them said their savings plan was significantly behind. More than 70% of post-war baby boomers aged 58 to 76 who are approaching retirement age believe that social conditions are changing too fast for their savings plans to keep up with their future retirement amount, that is to say, the amount of savings did not increase by 20%, but decreased by 11% due to prices and inflation.
The changing landscape affects not just the amount of savings, but the retirement age as well. About 60 percent of Americans prefer to delay retirement to save more money to meet rising expenses, as pension preparations slow down and the numbers fall short of expected annual savings. 45% of people delay retirement because they want to prepare adequate medical insurance for old age.
Twenty-four percent have been forced to use money in superannuation accounts because of increased spending. A quarter of respondents think they are very likely to work a few more years to save enough money to retire. Therefore, the average retirement age was extended from 62.6 to 64. But 15% of them expect to retire early, mainly because they want to spend more time with relatives and friends, as well as pursue other life goals and interests. Thirty percent of them had saved enough money to afford retirement.
With the development of medical technology, the average life expectancy continues to increase. If you want to enjoy your retirement life, you must plan and estimate the four major expenses required for retirement, including basic living expenses, medical insurance expenses, leisure and entertainment expenses, and nursing care costs to retire with peace of mind.
When calculating, pay attention to absolutely “overestimating” expenses, and don’t find out when you are old or sick that your retirement funds cannot support your quality of life or are not enough to cover medical and nursing expenses. This will allow you to retire happily and enjoy the next stage of your life.
