If you're a disciplined saver, you increase the potential of enjoying a comfortable retirement. How does your savings compare to national averages?
According to a study done by the Economic Policy Institute, almost half of American households do not have a retirement account.1 If you have an IRA or 401(k), you're already ahead of the game. The question is: Are you sufficiently funding your retirement during your career-building years? For many, the answer is no.
Compare your savings to the average. In 2018 dollars, average retirement savings of families by age are: 40: $72,773; 45: $88,001; and 50: $135,042.1 But these numbers are skewed by wealthy savers. The median savings numbers tell a different story.
Compare your savings to the median. Median savings better represent the entire population of families, including non-savers. The numbers in 2018 dollars are: 40: $4,544; 45: $6,707; and 50: $8,654.1 While your numbers may not be as high as you'd hoped, it's never too late to increase your savings.
High-income families save more aggressively. 88% of families in the top income quintile have retirement accounts. The percentages for the middle and bottom quintiles are 52% and 8%, respectively.1 While it's not surprising that the wealthiest families save more, these numbers are not encouraging for most others.
To be wealthy, save like the wealthy. Some folks can't afford to save, but for most of us, saving for retirement is a choice. Even a modest saving and investment program can pay dividends. The old adage of "pay yourself first" applies here-treating your monthly savings target as nondiscretionary will help boost your prospects for a comfortable retirement.
The best time to start saving is now. An age-appropriate saving and investment plan can help get you on a path toward success. Don't panic if your savings are below average. Instead, contact me to discuss how I can help you increase your savings and deploy your retirement investments. Together, we can take the steps you need to help brighten your financial future.
1Morrissey, M. (2016, 3 3). The State of American Retirement: How 401(k)s have failed most American workers | Economic Policy Intitute. Retrieved from Economic Policy Institute: https://www.epi.org/publication/retirement-in-america/