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What Is the Median Age of Retirement Savings? How Much Should I Put Away for Retirement? What Are the Age-Related Retirement Savings Recommendations? The figures may look impressive. Why? According to the Transamerica Center for Retirement Studies’ report,...

By Peter Daisyme

This story originally appeared on Due

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How Much Should I Put Away for Retirement? What Are the Age-Related Retirement Savings Recommendations? The figures may look impressive. Why?

According to the Transamerica Center for Retirement Studies' report, the median retirement savings in the United States by age is:

  • Americans in their twenties: $16,000
  • Americans in their thirties: $45,000
  • Americans in their forties: $63,000
  • Americans in their fifties: $73,000
  • Americans in their sixties: $117,000
  • Americans in their seventies: $172,000

How Much Should I Put Away for Retirement?

What Are the Age-Related Retirement Savings Recommendations?

The above savings figures may appear impressive, but consider this "rule of thumb" offered by some financial experts for how much people should have saved in their retirement accounts if they want to retire by the age of 67:

  • 1–2 times their annual earnings for Americans in their 30s

40-year-olds in the United States:

Americans in their 50s make 3–4 times their annual salary:

  • 6–7 times their yearly wage
  • 60-year-olds in the United States:
  • 8–10 times their yearly wage

That implies a 35-year-old earning $45,000 a year should have up to $90,000 in their retirement accounts, which is double the median and average amount saved by most Americans.

What amount of money will you require to retire?

The "80 percent rule" of retirement planning, according to some experts, is that you should prepare to survive on 80% of your pre-retirement income.

Your personal goals—early retirement, acquiring a second property, leaving a nest egg for your heirs, or dealing with health issues—could necessitate different preparation. The unpredictability of economic circumstances, medical expenditures, and your life expectancy will all have an impact on your retirement spending.

Starting in your 20s, many financial consultants recommend saving 10–15 percent of your gross income. That's on top of money set aside for short-term goals like a new car or unexpected expenses. It's also a good financial planning approach to use accessible tools to figure out how much you need to save for retirement. Additionally, using an online retirement calculator to verify your retirement savings by age will help you evaluate if you're on schedule to fulfill your financial demands in retirement.

Savings Alternatives That Can Assist

From your twenties to your sixties, the first step toward a pleasant retirement is to examine your income and spending and seek methods to save more money.

While keeping track of spending and managing finances may appear daunting, there are several resources available to make the work less onerous and to help you plan for retirement.

When you're in your twenties, you should start saving for retirement.

Many Americans in their twenties start their careers as entry-level employees. It may seem premature to consider retirement, particularly if you're still paying off school debts.

Contributing to a retirement account, such as a company-provided 401(k), is an excellent method to start saving for retirement in your 20s (k). Half of Millennials and Generation X expect a 401(k) to provide the majority of their retirement income, although Baby Boomers may be able to rely on Social Security, so this will be a crucial component of retirement if you're younger. Your company may match up to a specified proportion of your contribution. Take advantage of this opportunity, but don't get too excited—you've got at least 40 years to save for retirement.

Experts also advise that you build an emergency fund. Putting money aside for unexpected needs like house and automobile repairs safeguards your retirement funds from becoming your emergency fund.

According to Transamerica research, Millennials have the lowest median emergency savings of $2000 (although this is likely to rise with age). In all generations, just one out of every three workers had an emergency savings plan.

Withdrawing money from an IRA before reaching the age of 59 and a half isn't recommended, according to the IRS. The amount withdrawn is considered part of your gross income and is subject to a 10% penalty tax. This indicates that having a fund set aside for unanticipated events is preferable.

This is also an excellent opportunity to invest aggressively. You have more risk tolerance in your twenties since you have more time to recoup any losses. If you're intimidated by the prospect of investing, watch this video for an overview of basic investment vocabulary.

When you're in your 30s, you should start saving for retirement.

For Americans in their 30s, purchasing a home and starting a family are regular life events.

These changes are not only costly, but they also divert attention away from retirement savings.

Many people in their 30s are still paying off their school debts. Discover a balance between present costs and long-term planning.

First and foremost, reduce your spending. It's easy to focus on short-term costs, but don't forget to prioritize long-term goals such as retirement. You might also be putting money aside for your children's education. You may not have to work as hard to accomplish your retirement savings goals in the future if you pay closer attention to where your money is going today. Make saving a family affair and instill healthy financial habits in your children.

Second, attempt to set aside up to 15% of your salary for a retirement account (s). If you're in your 30s and haven't begun saving for retirement yet, you might want to consider increasing your contribution.

Take full use of your employer's 401(k) match if you haven't previously. Subtract the percentage of your 401(k) that your business matches from 15, and you'll have the amount you should put in on your own.

You're still young enough to have a larger risk tolerance, so don't be scared to take risks.

When you're in your forties, you should start saving for retirement.

While it is suggested that you save up to four times your yearly salary in a retirement plan, many Americans cannot afford to do so. The typical retirement savings amount for people in their 40s is $63,000, despite the fact that their annual salary is slightly above $50,000. Remember that you should have around three times your yearly pay saved by now, so check your account balance to see whether it matches that.

What actions may you take to achieve this objective? Any money you obtain from a raise should be deposited into a retirement savings account. The average time it takes to pay off a bachelor's degree in student loans is 19.7 years, so ideally, you've paid off your college debt and can now focus only on retirement funds.

There's still time to save for a decent retirement, even if you're behind. Make retirement a top priority in your budget, just after necessities like your mortgage, electricity, and food.

When you're in your 50s, you should start saving for retirement.

Retirement is closer than you think at 50, and if you haven't already, it's time to begin serious about saving. Saving up to seven times your yearly wage may sound daunting, but achieving this goal might put you up for success.

If you earn $50,000 or more each year, you should have at least $350,000 in the bank. Then if you're not there yet, look at your budget and see what adjustments you can make to get back on track. If you want to make changes to your IRA, you can see a financial counselor. You can contribute an additional $1,000 to your IRA and $6,500 to a 401(k) or 403(b) if you're 50 or older as a "catch up" for the 2020 and 2021 restrictions if you're 50 or older. You'll be able to withdraw from your IRA by the age of 5912, but if you can afford to wait, you'll profit from a larger savings pool afterward.

When you're in your 60s, you should start saving for retirement.

Now that the finish line is in sight think about your retirement objectives and strategies. Keep in mind that these savings help you maintain your existing standard of living. They also cover medical expenses in retirement. If you want to buy a beach property or cruise the world, you'll need to increase your retirement funds.

Make any required revisions to your savings strategy or put the final touches on it. Keep in mind that the expected median savings for this decade is $172,000 dollars. If you're still short of the 8–10 times your annual income savings goal, consider what assets you can sell. You might also contemplate staying in the workforce for a few more years. This may increase your income. It may also reduce the amount of time you'll need to tap into your retirement funds.

You'll also be eligible for Social Security benefits in your 60s. If you don't have enough money saved, Social Security may be a good option. However, you could hold off on collecting benefits until you reach 70 when the benefit increases halt.

The post What Is the Median Age of Retirement Savings? appeared first on Due.

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