It has again been reported that Americans aren't saving nearly enough to fund their post-9-5 years. Even with an improved economy, many are still falling behind on retirement preparedness, according to Fidelity Investment's Retirement Preparedness Measure (RPM).
According to the RPM, 55 percent of Americans are in fair or poor condition when it comes to being able to completely cover estimated essential living expenses in retirement, such as housing, health care and food. Under the RPM, working Americans fall into four categories on the retirement preparedness spectrum. The categories are linked to a numeric range (the higher the better), based on an individual's ability to cover estimated retirement expenses, even in a down market. It looks as follows:
The color coding is broken down into:
- Dark Green: Very Good or Better (95 or over). These households are on track to cover 95 percent or more of total estimated expenses, even in a down market. Thirty-three percent of those surveyed were dark green.
- Green: Good (80-95). On track to cover at least essential expenses, but not discretionary expenses like travel, entertainment, etc. Twelve percent of those surveyed were green.
- Yellow: Fair (65-80). Not on track to sufficiently cover all essential retirement expenses, with modest adjustments to their planned lifestyle likely. Fourteen percent of those surveyed were yellow.
- Red: Poor (less than 65). Not on track to sufficiently cover all essential retirement expenses, with significant adjustments to their planned lifestyle likely. Forty-one percent of those surveyed were red.
