![]() The average retirement savings by 55 may be just over $220,000, but for many people, that’s just not going to be enough. ![]() How to save: In your final decade before retirement (or maybe you’re planning to retire early), prioritize meeting your retirement savings goals. Recommended retirement savings: 6-8x your annual salary Take your salary into account to see how much retirement savings you have to make up for. The average annual salary in this age range is between $58,000 - $59,000, so someone with that annual income should have $150,000 to $200,000 saved. Increase your contributions to your retirement plans and tighten up on your budget if needed. Retirement may still seem far away but getting serious about saving for retirement can lay a solid foundation for your nest egg. How to save: Hopefully you’ve paid off your student loans by now and can focus on retirement. Recommended retirement savings: 3-4x your annual salary If you find you’re not on track to save 1-2x your annual salary for retirement, consider tightening your budget to make up for it. If you haven’t opened one, a traditional IRA or a Roth IRA are also good retirement accounts to have. Take full advantage of your company’s 401(k) match and contribute on your own, as well. Hopefully you have a higher salary now that you’re further into your career. How to save: Even though you may have more expenses than you did in your 20s-from buying a house, having a family or continuing to pay off student loans-don’t forget about saving for retirement. Recommended retirement savings: 1-2x your annual salary Begin to Make Savings Progress in Your 30s An emergency fund is best stored in a high yield savings account. That way, when unforeseen events happen, you don’t need to dip into your retirement savings. Another saving tactic you could look into is investing your money when you’re young, you can afford to have a higher risk tolerance as you have plenty of time to earn back any losses that may incur.Īnother good strategy is to start an emergency fund. You may have obstacles like student loans, but if you can afford to, put 10-15% of your salary towards retirement. How to save: People in this age group can contribute to their company-provided 401(k), chip away at their student loans and open other retirement plans like IRAs. Recommended retirement savings: Up to 1x your annual salary There are practical, smart steps you can take toward meeting the recommended retirement savings at any age: Learn How to Be Financially Smart in Your 20s It’s never too early to start saving for retirement. These savings are in addition to money that you may be setting aside for short-term goals, such as a new car, or unexpected expenses and emergencies like medical bills. Many financial advisors recommend saving a minimum of 10% of your annual gross income toward retirement at any age. In order to better estimate what you need to put away for retirement, ask yourself the following five questions: So, it’s advisable to give yourself a cushion and exceed the average retirement savings. Keep in mind that life is unpredictable–economic factors, medical care, and how long you live will also impact your retirement expenses. That means if you make $55,000 a year, you should have at least $385,000 saved for retirement. Experts say to have at least seven times your salary saved at age 55. According to these parameters, you may need 10 to 12 times your current annual salary saved by the time you retire. Some experts suggest planning to live on a minimum of 65 to 75% of your current income in retirement, but ideally you should plan to live off of 80% of your current income. How Much Money Will You Need for Retirement? With pensions and Social Security providing less financial security than in the past-coupled with an uncertain economic future-the pressure is on for working Americans to save as much as they can for retirement. According to Transamerica data, 40% of Americans expect to still work past age 65 while 14% expect to never retire. The 2019 Survey of Consumer Finances by the Federal Reserve found that average Americans approaching retirement ( ages 55-59) have saved $223,493.56, with similar numbers for ages 60-64 at $221,451.67.īut some individuals have saved much more and others have no retirement savings at all. It can be hard to know if you're saving enough to ensure a comfortable retirement. How Much Have Americans Saved for Retirement by Age 55? If you’re thinking about retiring at 55, you’ll want to ensure you have enough saved live off comfortably. Retirement at any age takes planning, there are even average retirement savings range targets to aspire towards throughout your career. Thinking about early retirement? If so, it’s important to review your retirement account balances early and think through how you’ll maintain your lifestyle.
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