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Home / Business / 62% of Americans make this pension savings wrong – are you? – The Motley Fool

62% of Americans make this pension savings wrong – are you? – The Motley Fool



We all make mistakes, and many of them hurt us somehow. A 2013 CareerBuilder survey found that 58% of CVs were rejected by companies due to typos. Many use fabric softener in all our lots of laundry, even when it leaves a coating on fabrics that reduce the absorption of towels.

Some of our most damaging mistakes are economical, and 62% of Americans make a quick mistake: do not save themselves nearly enough for retirement.

  A white keyboard is shown, with a large red key marked with the word oops.

Image Source: Getty Images.

The table below shows how much older Americans ̵

1; those in a decade or so from retirement – have sucked away. Among older workers, 62% have saved less than $ 250,000, an alarming statistic, according to the 2018 Pension Confidence Survey. And the older folks with $ 250,000 set aside (or even $ 350,000) aren't much better.

Amount saved for retirement

Workers Age 55+

Less than $ 1,000

19%

$ 1,000 to $ 9,000

6%

$ 10,000 to $ 24,999

$ 10,000 to $ 24,999

3%

$ 25,000 to $ 49,999

7%

$ 50,000 to $ 99,999

8%

$ 100,000 to $ 249,999

19%

$ 250,000 or more [19659009] 38%

Source: 2018 Retirement Confidence Survey.

The regular (but unfulfilled) 4% rule suggests that you withdraw 4% of your own egg in your first year of retirement, and then adjust for inflation in subsequent years to earn your money over the last 30 years. With that rule, $ 250,000 will give you just $ 10,000 in your first retired year, and a $ 350,000 account will generate an annual $ 14,000. Most retirees will be pushed hard to get a comfortable life with the small money , even with social security benefits added.

The numbers are even worse for younger Americans, but it is far less worrying because they have a lot of time to start sitting away money seriously. If a 30-year-old saves and invests just $ 5,000 a year for 35 years and earns an average of 8%, it will be enough to collect $ 930,000! But a 55-year-old saves $ 20,000 a year for a decade to end up with about $ 313,000 after that formula.

Amount saved for pension

Workers Age 25-34

Less than $ 1,000

37%

$ 1,000 to $ 9,999

16%

$ 10,000 to $ 24,999

] 10%

$ 25,000 to $ 49,999

13%

$ 50,000 to $ 99,999

12%

$ 100,000 to $ 249,999

9%

$ 250,000 or more [19659009] 4%

Source: 2018 Retirement Confidence Survey.

What to do if the pension savings are behind

If you are among sub-seafarers, what should you do? First you find a ballpark figure for how much money you need in retirement, to assess where you are. And if you are actually behind, take it with your heart, for there is still time to greatly improve your situation.

Here are some steps to take if you are in savings to be retired:

  • Delay goes on for some years. Putting off the pension by a few years will give you time to save more and your nose egg will support you for fewer years of retirement. It can also mean that you get several years on the employer's health plan, which can save money, and the funds in your retirement accounts will continue their compound growth while continuing to earn salaries in recent years.
  • Save more aggressively. No matter how much you suck away regularly now, you're aiming for more. Don't just save a certain amount, such as 10% of your income, provided it will be enough. Cross the numbers to see how much you really need to save. It's better to have more than enough to fall.
  • Use less. There are many ways to cut expenses, and you can probably shave $ 100, $ 300, or more of your monthly expenses. Switching from cable TV to a streaming service is a start. Cut back on lunches and dinners at restaurants.
  • Earn more . You can start by asking for a raise or looking for a better paying job. You can learn more, maybe earn some certification or designation, to qualify for better paying jobs. You can also take a side guide, at least for some years, to bring in more moola.
  • Delay begins to gather social security if you expect to live a longer than average life . The longer you delay (up to 70 years when the bonus to delay maxes out), the greater your controls will be. This strategy is not worth it for those who are likely to have average or average life expectancy, though. (The average monthly social security pension benefit was recently $ 1,461, by the way.)

It's a big problem if you're far away in retirement savings, but it's not necessarily an insoluble one. Learn more, work out a strategy, and do it with some discipline. That could mean the difference between staying at $ 25,000 or $ 40,000 annually in retirement.


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