|Source: Dorman Farrell LLC|
Take a look at the chart to your right. Read it and weep, or sulk, or whine. Yes, the debt figures include your mortgage balances too. For your convenience, there is a calculator to generate your target ratios based on your approximate age and annual income. For example, a 50 year-old with an annual income of $70,000 should have a minimum of $315,000 in savings and a maximum of $52,500 of debt. Depressed yet?
As if the daily grind and stress of life isn't enough, here's information from yet another source to make us panic about retirement readiness.
Most of us, myself included, go about our daily routine without thinking much about our golden years. Sure, we sock away money in our 401K and IRA accounts, but data like this makes us feel that our golden years may not have as much luster as we'd hoped.
Like it or not, we're all getting older and for those of us lucky enough to live years beyond our quitting day, we'd need to make the preparation now. I'm not sure how much weight we should give to the mountain of retirement data that is thrown upon us everyday, but burying head in sand isn't a wise move either.
What this chart is basically telling me is that most of us should reduce our debt and build up our savings. In other words we should manage our money better. Not being able to hit the exact targets is no excuse to not give our best effort. It could make a difference between a decent retirement lifestyle and scraping bottom to get by.