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Do You Have $550K Saved For Retirement?

New study finds you'll need 11 times your salary.Doing the math, $550,000 is about what the person who retired earning the average median household income should have saved, based on advice from a recent study by the human resources firm Aon Hewitt.

To figure your specific situation, multiply what you expect to earn in your final working year times 11.

That’s the figure Aon Hewitt says you’ll need to get through retirement beginning at age 65.

Don’t include your expected Social Security benefits. Those are assumed already in the calculation.

Of course, by any standard, we know Americans are falling well short of what they need for retirement.

And the folks included in this Aon survey are no exception.

The average “full-career contributing employee” is expected to fall 20% short — holding just 8.8 times their salary after retirement.

A “full-career” employee for the purposes of the study is described “as an employee with the potential to work 30 years or more with their current employer.”

About 30% of the people in this category “are now on track to retire comfortably.”

Aon warns that since this study considers a relatively narrow segment of the population, most people actually are probably further behind on saving what they need for retirement.

Super.

But I don’t find the scary statistics in this study nearly as compelling as the multiplier Aon provides.

Eleven times my final salary. That’s something I can get my head around.

I know I’ll need to begin saving more — quickly — if I want to reach that goal.

Where are you on your retirement savings goals?

One major note about this study: It looked at retirement resources assuming people would “maintain preretirement living standards.” Aon suggests most people will need to replace 85% of their income in the first year of retirement, including both savings and Social Security.

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