Reinforcing the Financial Figures for Retirement

Reinforcing the Financial Figures for Retirement

How much thought have you given to your retirement fund? For many, retirement may seem like a far-removed notion that needn’t be given much attention until later down the line.  For some others, setting aside extra money is not a luxury they are able to indulge in.  So if you have next to no money for retirement, you are not alone.

According to a report from the Employee Benefit Research Institute, about one-quarter of employed persons said that they and their spouse combined have less than $1,000 saved up for retirement. Half of those surveyed said they had less than $25,000. This may seem like a hefty sum of money, but measured financial practices in place can results in $25,000 in your reserve at age 30.

The general rule of thumb suggested by financial advisers is an annual 10% savings of income. For example, someone in their early 30s with an income of 50,000 per year should have $30,000 saved up for retirement. More than one-third surveyed said that they are saving less than 10% a year. Despite 41% being unable to estimate the amount needed for retirement, most people believe that they’ll need at least $500,000.

The biggest disparity between those on track with their retirement reserves and those who are not is access to a savings account at work. Employer-sponsored retirement savings plans, such as a 401(k), allow workers to save and invest a portion of their paycheck before taxes take effect. Taxes aren’t paid until the money is withdrawn from the account. Roughly about 55 million US workers do not have access to an employer-sponsored plan.

Despite the lack of preparedness, 60% of people surveyed said that they were confident in their financials to live comfortably throughout retirement.

Looking for a bit more guidance? Here’s a quick checklist to gauge how prepared you truly are and what courses of action you might need to take:

  • Save as much as possible in your retirement accounts
  • Seek professional advice if in doubt
  • Simplify your portfolio
  • Prepare a budget for your future expenses
  • Create a plan to pay off debt
  • Consider purchasing an annuity
  • Plan to withdraw from your retirement accounts
  • Sign up for Medicare and Medigap coverage
  • Determine the age you will retire
  • File for Social Security retirement benefits