Most Americans won’t be adequately financially prepared for retirement

According to a new Bank of America survey, 16 percent of millennials now have $100,000 or more in savings. Fidelity Investments, suggests have the equivalent of your salary saved by age 30 and to have 10 times your final salary in savings if you want to retire by age 67.

Our expert disagreed.

Walser Wealth Management Principle Rebecca Walser said the survey suggestion of having eight times your annual salary saved by the time you retire isn't even nearly enough to live comfortably.

Based on a $50K salary, that's only $400K saved.

Using the "four percent rule", that's only $16K to live off a year.

Walser said people need to think of using the standard "four percent rule" to get cash flow built in your portfolio for the rest of your life.

She said if you want to live off, say, $50,000 a year, you need to have that by the time you're in your 60s. And, don't forget to account for inflation.

"You just have to take what you want to live off of for the rest of your life, divide that by four percent and that gives you a really strong barometer of what you need by the time you retire, and then from there, what we do is we back it down by decades," said Walser.

She suggests to do the math and work backwards. If you want to retire at 65, you need at least 70 percent of that saved by 10 years out (at 55), so you have only 30 percent left to save.

Walser said to figure out what cash flow percentage people will need to make and on what portfolio to get you at $50K a year post-retirement.

"You take $50,000 and you divide it by four percent, you can see that you're going to need about $1.25 million saved by the time you retire," said Walser.

She said most Americans don't even start planning for retirement until their 40s, leaving 20 years or less to save enough money--like all your salary, which is nearly impossible.

Of course, the 401K isn't the best place for your money because of pre-tax. Instead, invest in an employer matched Roth 401K, if that's an option.

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