Kevin O’Leary, Shark Tank investor and entrepreneur, isn’t one to hold back when asked to share his two cents.
But if you ask for advice from Mr. Wonderful, just be prepared: he won’t dress you.
On the 2023 episode of Good Morning America’s Swimming with the Sharks, a concerned caller from New York asked O’Leary what percentage of his salary he should invest in his 401(k) since he’s not sure he can comfortably reach the recommended amount. and all other living expenses that he must be responsible for.
“The number is 15%,” O’Leary quickly replied, “And yes you can, by stopping buying all that crap you don’t need.”
Sure, it sounds easy. But as the caller and many Americans like him know firsthand, that doesn’t mean it’s easy.
Along with the COVID-19 crisis came the financial crisis. While the government rushed to support American workers with stimulus checks and student loan forbearance, all those efforts — along with supply chain problems and conflicts in Europe, among other things — ended up leading to the worst inflation the country had seen in 40 years.
Although inflation has since eased to a manageable 2.6% in October, rates have remained high and Americans’ budgets have been stretched. And their retirement accounts suffer as a result.
In fact, a 2024 survey of working-age Americans revealed that 73% of respondents said inflation made them the most worried about retirement. And 55% of them worry that they won’t achieve financial security in their golden years.
Part of the problem may be that how much Americans feel they need to retire has also suffered from inflation in the past few years. In fact, according to Northwestern Mutual research, that “magic rate” is now growing faster than the rate of inflation. As of 2024, American adults say they need $1.46 million to retire comfortably — up 53% from the $951,000 they feel they need in 2020.
However, with an estimated savings of just $88,400 according to Northwest, working Americans are left with a $1.37 million gap between what they think they need and what they actually have.
Read more: The cost of living in America is still manageable – use these 3 ‘real assets’ to protect your wealth today
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