Four Steps to Saving for Retirement
Not saving for retirement?
A 2018 Government Accountability Office study found that nearly one-third of Americans age 55 and older don’t have any retirement nest egg even a traditional pension plan.
According to Investopedia If you are earning $50,000 by age 30, you should have $25,000 banked for retirement. By age 40, you should have twice your annual salary. By age 50, four times your salary; by age 60, six times, and by age 67, eight times. If you reach 67 years old and are earning $75,000 per year, you should have $600,000 saved.
Not saving because you don’t have additional income to spare? Here are a few ways to ease into saving for retirement.
- Employer Plans – If you work for an employer offering a retirement plan, contribute to it! Most contributions to employer plans come out of your check pre-tax and many employers will match your contribution.
- Individual Retirement Arrangement (IRA) – There are different types of IRAs. Some are for employers and some are not. Your IRA can invest in stock-market correlated assets or if you use a Self-Directed IRA, your IRA can invest outside the stock market into assets like real estate, precious metals, notes and more. Contribute to yours.
- Social Security – These benefits are payments made to qualified retirees and disabled people, and to their spouses, children, and survivors. You can learn what Social Security benefits are due to you HERE
- “Keep the Change” – Banks and other companies like “Acorns” will help you save your spare change by rounding up your purchases to the nearest dollar and depositing those into a savings or retirement account.
Know that one out of every three 65-year-olds today will live past age 90, while one in seven will live past age 95, according to the Social Security Administration. If you retire at 65 and live to 95, your retirement will be 30 years long! The best way to be ready for retirement is to start today.