As you might have noticed, there has been some time since I last posted. This is a busy time of year for the business, and tax time issues have kept me from my schedule of new posts, but better late than never! An article from CNBC online this morning was my trigger to get back to the keyboard. It stated that the median retirement savings for Americans between the ages of 40 and 49 is only $6200, so that’s a good reason to start a series of blog posts on the topic of retirement – both preparing for and living in retirement.
First, let’s talk about “the median”. Obviously looking at a median number means that some people have saved a lot more, while many have saved nothing. I would also like to point out that I strongly believe that saving anything is better than saving nothing when it comes to retirement. Let me ask this: if you had to choose between living on just social security or living on social security with a little extra saved, which would you choose?
Now, we all realize that $6200 won’t get you very far if you want to retire, so how do we get into a better situation? The CNBC article contained 4 key steps that I agree with:
Save as much as you can. They recommend 10% of your earnings, but that is a pretty steep staring point. Start somewhere, then move to the next step.
Increase your savings regularly. If you started with 3% of your pay in order to get your employer’s match in your work 401k, increase that by 1% every six months or so.
Make your savings automatic. Have it taken right from your paycheck or automatically from a bank account. Out of sight, out of mind.
Try to save in addition to your 401k. Build an emergency fund (see my earlier posts), start a Roth, an HSA, or perhaps even cash value life insurance.
The moral of the story is, it’s never too late to work on this. It also doesn’t have to involve huge amounts of money. Saving a little bit over a period of time can make all the difference in the world. If you don’t believe me, check out some of the calculators in the Resources tab elsewhere on this website.
I’ll be writing more about preparing for and entering retirement over the next series of posts. If you have specific questions about your retirement situation, feel free to contact me at [email protected]
If you would like to read the CNBC article, here is the link: