The amount required for retirement varies for each individual. Nonetheless, there are milestones to strive for in each decade of life. Making a plan for your career is never too early, but getting started is also never too late.
According to the Federal Reserve’s 2019 Survey of Consumer Finances, only half of American households had some retirement savings. Like most people, you probably need to save more for your retirement. Not unexpectedly, the size of retirement savings varies by generation. According to Retirement Survey by Transamerica in 2019, Baby Boomer workers had the largest median retirement savings of $144,000, compared to Generation X ($64,000) and Millennials ($23,000).
This article will compare the retirement savings of individuals of various ages based on the recommendations of financial experts.
Those in their Twenties
Your salary most likely reflects the reality that you are in your twenties and just beginning your career. Additionally, you probably have a sizable burden from college loans. The Economic Well-Being of U.S. Households Report estimated that the average monthly payment for student loans in 2019 was between $200 and $299.
However, those in their twenties should have roughly 40 years before they retire, which gives them plenty of time to make up for whatever shortfalls they may have incurred. Contributing to employer-sponsored retirement plans like 401(k) or 403(b) plans is the most crucial thing you can do. According to investment management firm Fidelity, a minimum of 15% of your annual pre-tax income should be set aside for retirement.
Saving 15% of your salary isn’t realistic for most people; if that’s not an option, save as much as possible and use your employer’s matching contribution if available.
Those in their Thirties
If you’re in your thirties, you’ve likely risen through the ranks of your organization or obtained sufficient experience to move out of the entry-level pay grades.
According to data from Transamerica, people in their thirties had a median savings of $68,000. According to financial advisors, by age 30, you should have put away the equivalent of one year’s salary; by age 35, you should have saved twice that much; by age 40, you should have put away three times that much.
To attain these goals, tighten your family budget and save more of your salary if possible. If you have not yet begun to save, you will need to save a greater proportion of your annual income.
For instance, Fidelity advises saving 18% of your income year if you start saving at age 30, while someone starting at age 35 should aim for saving 23% annually.
Those in their Forties
Forty-year-olds are likely at the pinnacle of their careers. Expert advises saving three times your annual wage by the time you are 40. Therefore, if your income is $55,000, you should already have $165,000 in your bank account. It is advised that you have four times your annual wage saved by the time you are 45 and six times that amount by the time you are 50. Contribute as much as possible to your 401(k) if you can. Open an Individual Retirement Account (IRA) if you don’t already have one, and aim to maximize it as well.
Those in their Fifties
Those in their fifties are nearing retirement age, but there is still time to save for their future. In addition to paying for your children’s schooling, you may also support them with additional costs such as car payments and gas. In addition, while your medical expenses are undoubtedly increasing, the house may be getting older and needing repairs.
According to experts, the ideal retirement savings for those in their fifties is six to eight times their yearly income.
Those in their Sixties
You often start to benefit from decades of saving during this decade. In other words, according to Fidelity, you should have saved eight times your annual salary by the time you’re age 60 and ten times that amount by the time you’re 67.
Experts say the predicted median savings for people in their sixties is $202,000. It’s more difficult to save enough money at this time to cover any deficiency. Examine your assets to determine what might be sold to help make ends meet if you fall behind on your savings.
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Bio:
After entering the financial services industry in 1994, it was a desire to guide people towards their financial independence that drove Aaron to start Steele Capital Management in 2013. Armed with an extensive background in financial planning and commercial banking coupled with a sincere passion for helping people, Aaron has the expertise and affinity for serving the unique needs of those in transition. Clients benefit from his objective financial solutions and education aligned solely with
helping them pursue the most comfortable financial life possible.
Born in Olympia, Washington, Aaron spent much of his childhood in Denver, Colorado. An area outside of Phoenix, Arizona, known as the East Valley, occupies a special place in Aaron’s heart. It is where he graduated from Arizona State University with a Bachelor of Science degree in Business Administration, started a family, and advanced his professional career.
Having now returned to his hometown of Olympia, and with the days of coaching his sons football and baseball teams behind him, he now has time to pursue his civic passions. Aaron is proud to serve on the Board of Regents Leadership for Thurston County as the Secretary and Treasurer for the Morningside area. His past affiliations include the West Olympia Rotary and has served on various committees for organizations throughout his community.
Aaron and his beautiful wife, Holly, a Registered Nurse, consider their greatest accomplishment having raised Thomas and Tate, their two intelligent and motivated sons. Their oldest son Tate is following in his father’s entrepreneurial footsteps and currently attends the Carson College of Business at Washington State University. Their beloved youngest son, Thomas, is a student at Olympia High School.
Focused on helping veterans and their families navigate the maze of long-term care solutions, Aaron specializes in customized strategies to avoid the financial crisis that care related expenses can create. Experience has shown him that many seniors are not prepared for the economic transition that takes place as they reach an advanced age.
With support from the American Academy of Benefit Planners – an organization with expertise and resources on the intricacies of government benefits – he helps clients close the gap between the cost of care and their income while protecting their assets from depletion.
Aaron can help you and your family to create, preserve and protect your legacy.
That’s making a difference.
Disclosure:
Investment advisory services are offered through BWM Advisory, LLC (BWM). BWM is registered as an Investment Advisor located in Scottsdale, Arizona, and only conducts business in states where it is properly licensed, notice has been filed, or is excluded from notice filing requirements. This information is not a complete analysis of the topic(s) discussed, is general in nature, and is not personalized investment advice. Nothing in this article is intended to be investment advice. There are risks involved with investing which may include (but are not limited to) market fluctuations and possible loss of principal value. Carefully consider the risks and possible consequences involved prior to making any investment decision. You should consult a professional tax or investment advisor regarding tax and investment implications before taking any investment actions or implementing any investment strategies.
