By 50 Years, You Should Have at Least $318,000 in Retirement Funds, New Report Shows!
Despite retirement seeming like half a century away, it’s actually mighty closer than you think!
Indeed, most people rarely feel the time fly, and before they know it, they are as old and as grey as any chap can be! For young people, the mentality that retirement is decades away can make it much more difficult for an individual to save, because it can be quite difficult to determine whether or not you are moving in the right direction.
In fact, each and every person has a particular goal that they would like to achieve, so it might be pointless to play the comparison game with those around you.
That being said, this does not mean that there aren’t specific benchmarks that an individual needs to adhere to so as to ensure that they have set themselves on the right path to a successful retirement.
Saving Before the Big 50
By the time you get to the big 50, it’s only logical that will have saved enough money for a successful retirement. During this time, you are at your peak years when it comes to the amount of earnings that you make, and with retirement just around the corner, this is the most opportune moment to begin saving. In fact, at such an age, it is desirable to have about six times of what your annual income is saved up.
This figure was calculated based on research conducted by Fidelity Investments which makes the assumption that workers save roughly 15% of the annual salary that they receive on a yearly basis. They do this starting at the age of 25 years.
Moreover, as they save, they further dedicate at least 50% to boost their investment portfolio by investing in stocks throughout their lifetime.
Additionally, the researchers assumed that the given individual would likely retire at the age of 67 while still maintaining their pre-retirement spending levels
Analyzing These Numbers Deeper
Indeed, saving six times your annual wage might seem like a lot of money for must. Nevertheless, the truth of the matter is that when you plan to retire, it is wise to do so having a lot of money at your proposal.
That being said, it might be easier said than done.
For starters, most workers aged between 45 to 54 have an annual salary of about $53,000 as per statistics released by the Bureau of Labor Statistics.
Now, crunching the numbers, six times that amount would translate to about $318,000 a year. Hence, if one is supposed to save about 15% of their salary, this would translate to having about $8000 every year.
Moreover, if you happen to be earning about 7% in returns on your annual investments, that means that if you save $318,000 by age 50, you will also have $1.25 million at the age of 67, assuming that your salary remains consistent throughout your remaining working years.
What to Do If You’re Lagging in Your Saving Strategy
If you are like most individuals, then chances are that you are behind by several hundred thousand dollars in terms of your retirement plan. As a matter of fact, data released by the Insured Retirement Institute has noted that 50 percent of baby boomers have no retirement savings.
Nevertheless, just because you are in a well-paying job doesn’t mean you have the luxury to take a break. If you are serious about retiring comfortably, then you will have to make some sacrifices to get back in the right direction.
Indeed, some analysts advise that individuals who are lagging behind need to put at least 15% of their salary to retirement.
The advantage of Social Security Benefits
That being said, there is also the advantage of the Social Security benefits which provides an individual with the opportunity to make up for the lack of proper saving.
Thanks to this benefits, the average retired individual who becomes a beneficiary receive roughly $1400 every month.
While that might not be the most comfortable money to live with, you can also determine how much you can get by having a look at the Social Security Calculator that will determine your estimate based on the numbers that you provide.
Last but not least, another factor that is vital in helping you save money for retirement is employee matching contributions which are where you and your employee will each contribute toward your retirement fund.
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