Kevin O’Leary, the outspoken Shark Tank investor and entrepreneur, isn’t one to hold back when asked to share his two cents.
But if you ask Mr. Wonderful for advice, just be prepared: he’s not going to sugarcoat it.
In 2023 segment on Good Morning America’s Swimming with the Sharks, a concerned person from New York asked O’Leary what percentage of her salary she should put into her 401(k), since she’s not sure to be able to comfortably reach the recommended amount with all their other living expenses to consider.
“The number is 15%,” O’Leary immediately retorted, “And yes, you can, by stopping buying all the crap you don’t need.”
Sure, it sounds simple. But as the caller and many Americans like her know personally, that doesn’t mean it’s easy.
The COVID-19 crisis has been accompanied by a financial crisis. While the government moved quickly to support American workers with stimulus checks and student loan forbearance, all of that effort — along with supply chain issues and conflicts in Europe, among other factors — ultimately led to to the highest inflation the country has seen in 40 years.
Although inflation has since returned to a more manageable 2.6% in October, prices remain high and Americans’ budgets remain strained. And their retirement accounts are suffering.
In fact, a 2024 investigation of working-age Americans found that 73% of respondents say inflation makes them more concerned about retirement. And 55% of them worry they won’t achieve financial security in their golden years.
Part of the problem may be that the amount Americans believe they need for retirement has also experienced some inflation in recent years. In fact, according to a study by Northwestern Mutual, this “magic number” is now growing faster than the rate of inflation. In 2024, American adults say they will need $1.46 million to retire comfortably, an increase of 53% from the $951,000 they estimated they would need in 2020.
However, with an average savings of just $88,400 according to Northwestern, American workers are left with a $1.37 million gap between what they think they need and what they actually have.
Learn more: The cost of living in the United States is still out of control. Use These 3 “Real Assets” to Protect Your Wealth Today
