Does your money disappear before the end of the month? If you’re like most Americans, you are more tuned to getting the immediate bills paid vs. thinking about way out in the future.
The story here is your retirement. The vast majority of Boomers (born 1946-1964) and seasoned seniors (born before 1946) have saved very little for their retirement years. In fact, 50 per cent of total Americans have put away nothing, nada for the Golden Years.
1 in 3 Americans Have $0 Saved for Retirement
Here is the research based on a 2016 gobankingrates.com survey: 35 per cent of all U.S. adults have about several hundred dollars set aside as retirement savings. Thirty-four per cent have zero savings and about half have no retirement account savings at all.
The survey cut across three income groups: millennials (18-34), Generation Xers (34-54), and baby boomers/ seniors (55 and over) with the intention of determing how these groups are saving for retirement. The survey revealed that many people are not on track to have enough money to cover their necessary needs during retirement.
Most of our concern is the situation of baby boomers and seasoned seniors who are reaching the “tipping” point of having nonsufficient resources to have a full retirement.
The key to retirement savings success is to begin as early as you can, take advantage of any employer matches, and automatically transfer funds from your paycheck to your retirement fund so that you do not even think of that money as disposable income. Treat savings as an expense and pay yourself first.
As seniors get closer to joining the retirement club, the gap between the savers and the save-nots widens. Although a larger portion of people age 55 and over report high-balance retirement funds ($300K+), there remains a significant subgroup that has little to no retirement savings.
Among those 60 and over, about a 25 percent have sufficient retirement savings, but the other 74 percent are still behind.
What’s the problem? The answer is “Procrastination”. Concerned about the bills due today and the things you want to buy tomorrow. Before you know it, twenty or thirty years have passed in a flash. Retirement age is coming and you know you don’t have enough money to retire with the lifestyle you’re accustomed.
From our book, Rollover, here are a few things you might consider as you move from a life of accumulating wealth to a life of distributing wealth:
#1 Work Your Contributions at Work. While you’re working, maximize the contributions to your retirement plan (i.e. 401(k) etc). Go max on the amount your employer is contributing.
#2 Work Longer…Retire Later. Having income coming in gives you a leg up to continuing to put funds into your retirement account. If your company provides health insurance, so be it and stay as long as you can.
#3 Cut Expenses, BIG and Little. Move somewhere where housing and everyday expenses are lower. How about downsizing to a smaller place like a condo or apartment? No new car, keep the old one. Investing that $400 new car payment for a 5 percent return to put more than $27,000 into your retirement account in a five years.
#4 Apply for Social Security… Now or Later. If you don’t need that SS check at 62, don’t apply until age 66. It means around 8% more per year on your final award. By waiting until age 70, the monthly benefit would be $1690 over $960 at age 62. Be careful, rules are changing. Check it out.
#5 Put Your Money Where the Returns Are. Educate yourself or consider paying an independent professional in choosing the right asset-management process during your retirement years. It can be a minefield without good advice.