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Retirement Deficit: Most Americans Face Post-Work Lifestyle Decline

Are you setting aside enough for retirement? Probably not.

A little more than half of U.S. households are at risk of being unable to maintain their pre-retirement lifestyle in retirement, according to reports from the Center for Retirement Research at Boston College. A big part of the problem: lackluster savings rates.

The Vanguard Group estimated that the median retirement-plan contribution rate was 6 percent in 2014, while the Transamerica Center for Retirement Studies put it at 8 percent this year. Workers in plans with auto enrollment may save even less, with some sticking to the default contribution rates of 3 percent or less.

That's shy of the often-bandied rule of thumb to set aside at least 10 to 15 percent of your annual income, with those savings including your contributions as well as any employer match to a retirement plan. Worse, it may be far short of your ideal rate based on your age, expected retirement horizon and past savings patterns.

"Everybody has different needs and different goals," said Carolyn McClanahan, a certified financial planner in Jacksonville, Florida. (Check your progress against peers and age-based benchmarks here).

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So-so savings today can make it harder to catch up down the line. Based on current savings rates, workers in their 30s would need to increase their savings rate by 7 to 8 percentage points to meet retirement goals by age 65, while those in their 40s would need to set aside 13 to 16 percentage points more, a 2014 report from the Center for Retirement Research found.

What's worse is that households with workers in their 50s, depending on their income, might need to boost contributions 29 to 35 percentage points to have adequate savings.

"Time is really running out for them," said Kevin Meehan, a certified financial planner based in Itasca, Illinois, of those workers closer to retirement. Workers who start saving at a young age have the advantage despite low salaries, thanks to decades of compounded growth, he added.

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But workers don’t save less than they should for frivolous reasons. "A lot of people don't save because they're barely getting by," Meehan said. In the Transamerica survey, 45 percent of workers said they base their contribution rate on what they can afford, making it the most popular response five years running.

Despite those pressures, a quarter of workers increased their contributions over the last year, according to the survey. Only 3 percent of workers contributed less, and just 1 percent stopped saving altogether.

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To figure out the right contribution rate for you, start by assessing your needs.

There's no "magic number" to aim for, said McClanahan. "How much do you need to have your lifestyle in retirement?" she said. "The biggest chance of success for being able to retire is not how much you save, but how you spend."

Curbing spending now can not only free up cash now for retirement savings and other goals, but it'll also mean you'll be able to get by on less in retirement (assuming you plan to maintain or decrease your current cost of living after you retire).

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Even when money is tight, aim to at least contribute enough to get the full employer match, said Wen Jie Lin, a certified financial planner in Brooklyn, New York. It can provide a nice boost: In the first quarter of 2015, Fidelity reported the average employer contribution at 4.4 percent.

"That's free money," Lin said. "You shouldn't pass that up."

Be cautious with pushing back your anticipated retirement date. That can help you squeak by with a lower savings rate, but when you leave the workforce isn't always something you can control.

"The problem with planning as if you're going to work until your 70s is, what if you can't?" said McClanahan.