’)According to a recent survey, the percentage of Americans with virtually no retirement savings grew for the third straight year, with 43% of workers socking away less than $10,000 for retirement. Shockingly, 27% of workers have less than $1,000 saved for retirement. Unless these individuals take drastic action immediately, they will be forced to work forever.
Contribute to Your 401k As a result of the recent economic environment, many companies have stopped matching employee 401k contributions. Therefore, many employees suspended their contributions as well. Unfortunately, that’s a huge mistake. While missing out on the free money of a company match is disappointing, it’s still in your best interest to invest in your 401k. When you invest in your 401k, the money is taken prior to being taxed, which saves you money and lowers your taxable income.
Automate Your Savings The best way to ensure that you contribute to your retirement on a consistent basis is to automate your contributions. This is another benefit of 401k plans; the money is taken from your paycheck before it ever gets to you. You can extend automatic retirement investing beyond your 401k as well. Your IRA and taxable retirement accounts will also allow you to set up regular, automatic contributions.
Do the Math To determine how much money you should be setting aside for retirement, crunch the numbers. According to the survey, only 46% of workers have calculated how much they’ll need for a comfortable retirement. There is a plethora of online tools you can use to calculate how much you’ll need to maintain your lifestyle through retirement. Additionally, your 401k administrator or mutual fund company should be able to help you.
As difficult as it may seem to set aside even the smallest amount for retirement, it’s imperative to save what you can. Otherwise, you can count on working well into your golden years.
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