It’s National Save For Retirement Week, and in the spirit of retirement readiness we decided to find out just how prepared Americans are. With Personal Capital’s newly launched, interactive Retirement Readiness Map, we’ll tell you where your state stacks up in retirement readiness.
To create the map, we collected data* from real Personal Capital users across the country, who are preparing for retirement with our Retirement Planner tool. The darker the state is on the map, the more retirement savings users have.
Our #1 takeaway from the study was that when it comes to saving for retirement, planning ahead is your best friend. Our data shows that user who have used Personal Capital’s Retirement Planner have saved, on average, 75% more than users who haven’t. You’re ready to give it a try now too, aren’t you?
As you’ll see in the map, we also made some other very interesting retirement trend discoveries:
The East Coast Rules In Retirement Saving
Our data shows that the East Coast is the most retirement ready region in the US. To highlight a few top savers – Delaware is the #1 most prepared, Connecticut is the #2 most prepared, and New Jersey is the #3 most prepared. California, on the other hand, falls far behind – landing at #20 overall.
East Coasters are also the most focused on funding education goals – New Jersey, Massachusetts and New York rank as the top 3 savers for education expenses. Average savings for a 4-year education by New Jersey, Massachusetts and New York are $199,039, compared to California at #5 with an average of $174,684.
Millennials Pave A New Path Of Financial Priorities
It’s no secret that today’s Millennials are facing a boatload of financial challenges, but we also discovered that their financial plans in general are quite different from those of their parents.
As Bill Harris noted, “Millennials face significant financial challenges, but they’re also carving a new path for themselves. Our data shows that Millennials plan to work fewer years and spend less money on major purchases like owning a home, while at the same time they plan to donate more to charity than other generations.”
On average, Millennials only plan to spend $142,274 on a home purchase – much less than Gen Xers planning to spend $686,739. But when it comes to vacationing, Millennials have $325,357 of vacation plans by retirement. And, Millennials who expect an inheritance hope it will amount to an average of $1.06 million. Another factor that differentiates Millennials from other generations is hopes for fewer working years – they plan to work 15 years on average, and saving $445,687 for retirement.
University & Charity Costs Take Priority
In addition to retirement savings, education and giving to charity are top priorities for savers. Education is the #1 savings goal for the majority of Personal Capital users – 60% plan to save $149,956 on average for the 4-year expense. Charity is the #3 savings goal for Personal Capital users, who hope to spend $345,772 on charitable gifts over the next 35 years. Millennials are the most giving generation, allocating $382,485 to give to charity.
How To Get Retirement Ready
So, what is your state of retirement readiness? If you want get on top of your retirement readiness game, start with a retirement plan. And should you need a hand, our team of expert Advisors is ready to help here.
*To obtain this data, Personal Capital analyzed the retirement accounts of dashboard users on a completely anonymized basis. Retirement savings figures were compiled from 134,022 Personal Capital users. Goal data was compiled from the 8,028 users who set them in Personal Capital’s Retirement Planner tool. Goals are presented in Personal Capital’s app as projections of future income or expenditures. For the amounts listed, Personal Capital multiplied the yearly value of the goal times the number of years entered to get the total value. Averages were then computed on top of that across all of Personal Capital users. Generations are defined as: Baby Boomers, year of birth between 1943 and 1964; Generation X, year of birth between 1965 and 1979; Millennials, year of birth between 1980 and 2000.
The content contained in this blog post is intended for general informational purposes only and is not meant to constitute legal, tax, accounting or investment advice. You should consult a qualified legal or tax professional regarding your specific situation. Keep in mind that investing involves risk. The value of your investment will fluctuate over time and you may gain or lose money.
Any reference to the advisory services refers to Personal Capital Advisors Corporation, a subsidiary of Personal Capital. Personal Capital Advisors Corporation is an investment adviser registered with the Securities and Exchange Commission (SEC). Registration does not imply a certain level of skill or training nor does it imply endorsement by the SEC.