Retirement Savings: Good and Bad News
Most of us have to rely largely on ourselves for our retirement. Social Security, which recently offered average monthly benefits of $1,365 (that’s about $16,000 per year), isn’t likely to support anyone comfortably on its own.
Unfortunately, according to the 2017 Retirement Confidence Survey, 24 percent of respondents reported having less than $1,000 saved for retirement, while a whopping 55 percent had less than $50,000. Millions of Americans seem headed for trouble.
Fortunately, it’s not too late for most people to take steps to improve their financial future. Here are a few:
• Have a plan. Take some time to figure out how much money you’ll need in retirement and how you might amass that sum. Online retirement-planning calculators, such as the one at finra.org/ retirementcalculator, can be helpful. • Make the most of retirement plans. You can contribute up to $5,500 ($6,500 if you’re 50 or older) to a traditional or Roth IRA in 2017, getting a tax break in the process. If you have a 401(k) or 403(b) plan at work, you can sock away up to $18,000 in it this year ($24,000 if you’re 50 or older), often collecting free matching dollars from your employer along the way. Contribute generously and regularly to such accounts for maximum retirement benefit.
If you can sock away $8,000 annually for 15 years, for example, and it grows by an annual average of 8 percent, you’ll end up with more than $230,000.
• Work a few more years than you originally planned to, if you need to. A few more years of work means a few more years of contributions toward retirement savings and fewer years in which you withdraw from that nest egg. You might also benefit from employer-sponsored health insurance for a few more years, and you can make your ultimate Social Security checks bigger by delaying starting to collect them, too.
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