Learn how much money the average worker has saved in retirement, 3 steps to take if you're behind on saving enough, and why you need to prepare for early retirement even if you don't think you need to.
77% of workers have less than $250,000 saved for retirement.
The next largest group has less than $1,000 saved!
If you save 1% more of a $50,000 income, then:
4% for 30 years @7% grows to $217,370 5% for 30 years @7% grows to $271,000, a 25% increase!
3 things you can do:
Boost savings. Delay retirement. Cut spending.
Use catch up provisions to save more.
Traditional and Roth* IRA's allow for an extra $1,000 catch up or $6,500 contribution instead of $5,500 when you're over age 50.
Pay attention to modified AGI limit:
Single $117,000 - $132,000 Married $ 184,000 - $194,000
Roth contributions are phased out at these levels.
SEP IRA
$53,000 maximum on $265,000 considered compensation (25% of compensation)
401(k) and Solo (k)
Standard contribution is $18,0000, catch up is $24,000 (over age 50)
Simple IRA Employers match up to 3%
Standard contribution is $12,500, catch up is $15,500 (over age 50).
Boost Social Security 8% annually for each year you put it off.
Only take 4% out of your retirement plan and you likely won't outlive your income.
Retirement income + Pension + Social Security + Side Hustle = Retirement Income
Can you downsize your home and use equity for retirement?
Save more on the front end and save more for retirement as soon as possible.
Start saving in your 20's if possible. The sooner the better!