How far along are you on the road to retirement? Some of us are further along than others. Saving for retirement is the way to reach your destination.
When it comes to putting money away, the average retirement savings is $167,944. The average age of retirees, according to the article reported by the Retirement Industry Trust Association is 67 for those born after 1959.
Generational retirement savings break down as follows:
- Boomers: $404,664
- Gen X: $184,861
- Millennials: $90,648
- Gen Z: $35,570
Am I saving enough?
It’s up to you to determine your own retirement “number”. Having adequate savings in retirement is based on several factors:
- The lifestyle you wish to maintain
- Anticipated medical expenses
- Income taxes
- General inflation
Recently, rising prices led to biggest cost-of-living adjustment to benefits in four decades.
The Social Security Administration (SSA) announced Oct. 13, 2021 that its annual cost-of-living adjustment (COLA) will be 5.9 percent, a boost to average retirement benefits of about $92 per month for individuals. We may likely see another COLA boost in the future. The 5.9 percent hike is the biggest since 1982, and it applies to Supplemental Security Income (SSI) benefits, too. The average retirement check will increase by $92, to $1,657 starting in January 2022. Supplemental Security Income checks will get a boost as well.
Which retirement accounts should I pull from first?
In this article, Windgate Wealth Retirement says the first places you should generally withdraw from are your taxable brokerage accounts—your least tax-efficient accounts subject to capital gains and dividend taxes. By using these first, you give your tax-advantaged accounts (IRA, Roth IRA) more time to grow and compound.
Wall Street or Main Street?
When it comes to investing your retirement savings do you choose Wall Street or Main Street? Take your pick. Wall Street-based assets (stocks, bonds, mutual funds, etc.) offer a traditional way to invest but not without volatility as we have seen in 2022.
Self-Directed IRAs and 401(k)s allow saving into alternative investments. This financial asset class is outside the conventional equity/income/cash categories. Private equity or venture capital, hedge funds, real property, commodities, and tangible assets are all examples of alternative investments.