How much is an hour of your time worth? And how are your retirement savings progressing?
Two relatively simple questions, but a new study from Empower reveals that most Americans cannot answer with accuracy, overvaluing their time while underestimating their readiness for retirement.
The average amount that respondents believe an hour if their time is worth is $240 which equates to almost half a million dollars a year based on a 40 hour week. Millennials say it's worth $328.84 per hour, followed by Gen Z at $266.92, Gen X at $215.90 and Boomers at $137.19.
One third of people said that their time is worth a more modest $50 per hour, but a quarter of Millennials said it’s worth $500 per hour, or more than $1 million a year. The average annual U.S. salary is around $59K.
Perhaps most participants in the study are not really expecting to achieve those lofty rates, as when asked about their retirement savings most believe they are behind on their goals. Half think they are running out of time to save and 43% would like to be able to time travel back to start saving earlier.
However, 44% said they did start saving early enough and almost half would choose a longer retirement with less money rather than have to stay working for longer.
The good news is that, based on data from the Empower Personal Dashboard, the average 401(k) balance is $291,810, rising to $580,259 for people in their 50s approaching retirement age.
More than a quarter of respondents would spend $5,000 per year to have someone else manage their long-term financials, investments, and savings and 63% "feel wealthy" if they have enough time to spend with family and friends with four in ten willing to pay for an easier life today even if that means having less money later.
No study these days is complete without a question about AI and 21% told this survey that they would use AI to recommend money moves to plan for retirement. A quarter would use it to help pay bills on time and or to make a budget by examining personal financial accounts.
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