Were you surprised to learn that Brett Kavanaugh, a Supreme Court justice nominee with an annual income of $247,000, could have racked up debt and saved so little for retirement?
A recent article in Vanity Fair reports that the Washington native accrued between $60,000 and $200,000 on three credit cards and a loan for Washington Nationals tickets as well as home improvement loans. While it’s not hard to imagine going into debt living in the DC metropolitan area, it is surprising to think that we may be investing our money more wisely than someone appointed to the highest judicial bench in the land.
Brett Kavanaugh’s story unfortunately is not unique. According to a CNBC article 35% of all adults in the U.S. have only several hundred dollars in their savings accounts and 34% of Americans have NO savings at all. Even 40% of Baby Boomers are not ready for retirement. This shouldn’t be shocking when you look at the savings accounts (or lack thereof) for the vast majority of Americans. According to the EPI, nearly half of families have no retirement account savings at all, including IRAs and 401(k)s.
The median retirement account for U.S. families is just $5,000. Even older workers who can see retirement on the horizon aren’t prepared for it. The median savings for families whose wage earners are between 50 and 55 is only $8,000. For those who are between 56 and 61, it’s $17,000. That’s not anywhere near enough money to get you through your golden years.
The good news is that this crisis can easily be rectified with self-discipline. If you can commit to saving only 6% of your salary, or 3% with a match by your employer, you will be able to see the money add up over time. Using a $76,000 annual salary as a basis for our calculations, if you begin saving 6% of this at age 25 (about $760 a month), you will amass nearly $600,000 when you are ready to retire.
It isn’t too late for our potential Supreme Court justice to begin either. With a simple savings plan and some smart budgeting, Judge Kavanaugh will be able to contribute more towards his retirement account, while still managing to keep his kids at Blessed Sacrament School and cheering on his beloved Washington Nationals (a passion those who know me know I share.)