Mom & Dad might have the wrong answers

Households with pensions

When I asked my parents how much I should save in my 401K, I got the standard answer which was, "How much does your employer match"? While not a bad place to start, this definitely wouldn't work long term. I took this advice initially which was a good starting place, but not a rate I would want to stop at.

The reality our parents faced was considerably different than younger generations. If your parents are from the silent generation, they likely had a pension that they are still getting checks from to this day. As our retirement system has changed, so have the demands on workers. It is imperative for workers to save a lot more than our parents because we likely won't be covered by pensions. The destruction of the pension system started with the steel mills and continued with the airlines (Eastern anyone?).

To discover what might be a solid savings rate for you, work with your retirement plan advisor to determine the best path forward for your household.