Retirement No Retirement Savings at 50 Written by: Scott Page
No Retirement Savings at 50

The alarm goes off, the coffee begins brewing – another workday is underway. It’s the rinse and repeat of the daily grind. But what’s your end goal?

At some point, we all retire. Now is the time to make sure retirement meets your expectations (or at least pays for itself).

According to the Employee Benefit Research Institute’s 2019 Retirement Confidence Survey:

  • Two-thirds of workers are saving for retirement and 7 in 10 are excited for it.
  • 2 in 3 are confident they are doing a good job saving for retirement and know how much they will need to have saved to live comfortably – but 42% have actually tried to calculate how much money.
  • 1 in 3 who have tried to calculate how much they will need in retirement estimate they will need at least $1 million – a significant increase from 27% in 2016.
  • 59% of workers – up from 54% last year – feel confident they know how much they will need for medical expenses in retirement, though fewer than 1 in 3 have actually tried to calculate how much is needed for medical expenses.
  • 6 in 10 workers say their level of debt is a problem, including 19% who say it is a major problem.

If your golden years are approaching, do not let the fear of retirement and not having enough money to live comfortably cripple your mind.

Fact is, age has its advantages. Did you know that if you’re 50 or older you can make “catch up” contributions toward retirement? This allows you to move an extra $1,000 each year into a traditional IRA or Roth IRA. Even better, for 401(k), 403(b) and 457 plans you can add and an extra $6,000 each year.

Also, compound interest can play to your favor. If you’re age 50 or older, you can contribute up to $7,000 annually in an IRA. After 15 years, the account could have $130,000. Work a couple extra years, until you’re 67, and that tax-free money could be $260,000 or more – and that does not include 401(k), 403(b), 457 plans or your spouse’s retirement contributions.

By being fiscally responsibly, you can make the most of the daily grind to reap the benefits when it’s truly quitting time.

 

Reference:

https://www.ebri.org/docs/default-source/rcs/2019-rcs/2019-rcs-short-report.pdf

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