Are You Saving Too Much for Retirement? - KHGI-TV/KWNB-TV/KHGI-CD-Grand Island, Kearney, Hastings

Are You Saving Too Much for Retirement?

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Could you be saving too much?

It isn't something you hear every day but one financial expert said some Americans may be putting aside too much of their money for retirement.

Most Americans can't rely on pensions and plan for their retirement by saving a portion of their earnings. However, they may be overestimating just how much they need.

David Blanchett, of Morningstar Investment Management, found that many people save an average of 20 percent more than needed for retirement.

The long standing retirement rule has been that you need to replace about 70 to 80 percent of your pre-retirement income when you finally decide to stop working.

Blanchett examined expenses and found that number may be too high.

He said people tend to spend the most money in their 40's and 50's but noted that spending declines once kids are out of college and mortgages are paid off.

Based on that logic, he said that many people may only need to replace about 50 percent of their pre-retirement earnings.

This means if your average income is around $56,000 a year, social security will cover a good chunk of your likely spending over the age of 65. He did note that those who earn more may need to save more if they want to maintain their standard of living.

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