As you'll see at the end, though, even with reduced benefits in the future, Social Security can play a key role in your retirement. That's because it lumps your payments into the Social Security system in with any contributions you make to a pension plan. It's kind of a misnomer when the BLS offers "after-tax" numbers. Pensions and Social Security ($445 per month) I should note that these figures include the costs of pets, TVs, hobbies, and any type of event you might attend. When you think about it, it's a pretty good deal when you're able to spend as much on entertainment as you do on healthcare. Meats, fish, eggs, fruits, and vegetables make up over 40% of the $310 that is spent monthly for food at home. Typically, $243 is spent on eating out (including fast food). Read More: 3 Companies Running Big Cable Out Of BusinessĮven though our "average" household is likely to include a young child, that doesn't stop everyone from going out to eat. Of this total, about $160 per month is used to cover insurance premiums, which likely means that employers are chipping in a significant percentage of the total cost of coverage. Healthcare spending is one of the only categories that consistently inches upward throughout life - even after you've retired. The rest is used on maintenance, insurance, and "other vehicle expenses." Last year, an average of $204 per month was spent on gasoline - though you can bet that this figure will be lower when 2015's numbers are published. This includes monthly payments for the purchase of new/used cars, which runs roughly $296 per month. The rest of the balance of housing money is devoted to utilities, household supplies, furniture, and appliances. Obviously, this figure will vary widely based on location. The average rent/mortgage check is $894 per month. Read More: Tiny Company Powering Apple’s Biggest HitsĪmong households in this age group, 61% are renting. Here's how that paycheck gets divvied up across the nation. The average household income for this group is $54,622 after taxes - or $4,552 per month. Now that we have that out of the way, on to our numbers! On average, there are between one and two cars in the household, and there's an even split between single- and dual-income households. The household typically includes two adults and one child under the age of 18. Of these folks, 71% have attended college. Technically, the data isn't solely for those "just out of college": it includes all households where the reference person is between 25 and 34. Salaries are typically lower, and student loans have ballooned lately.īut is this really the case? Using information from the Bureau of Labor Statistics' (BLS) Consumer Expenditure Survey for 2014, we'll see how - done prudently - the average American is very capable of laying a solid foundation for a nest egg.
But popular wisdom tells you that it is just this demographic that has a tough time saving for retirement.
No one is in a better position to harness this force than those who have just started earning a regular salary. Anyone who wants to retire comfortably - or early - knows that the key is using compound interest to your advantage. Albert Einstein once said that the most powerful force in the universe was compound interest.
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