As workers across the country march toward retirement, many wonder if they have saved enough to live comfortably once they’re no longer earning a paycheck. People enter into retirement savings at many different ages. While most retirement planning experts agree that the earlier one starts, the more secure financial future they will have once they retire. Not everyone has that luxury to start so young, however, and if you are behind on your retirement savings, the time is now to begin funding your future.

A recent survey conducted by the U.S. Government Accountability Office found that on average, Americans between the ages of 55 and 64 have saved approximately $104,000 in retirement plans. That sounds like a lot, but it isn’t. Let’s explore some retirement savings milestones by age.

In Your 20s

The younger you are when you begin to plan for your retirement, the better off you will be. In fact, people in their early- to mid-20s can fully invest the maximum contribution to a Roth or Traditional IRA for just a few years and expect to retire as millionaires by the time they hit retirement age or 59 ½ years of age in the case of a Roth IRA. The power of compounding interest on investments makes that possible. In various surveys, the average 20+-year-old employee has about $16,000 saved away for retirement…not terrible, but not all that great either.

All’s not rosy for 20-somethings, though. Many young employees have steep student loans to pay off, and many may not be earning a good salary at this early stage in their careers. Because of these financial hurdles, many younger people are not able to contribute the full annual amount to their retirement plans. The plus is that one can expect about 40 years of work before it is time to retire, so there is plenty of time to play catch up. For now, contribute the maximum amount you can to your retirement plan, especially in employer-matched programs like 401(k) or 403(b) plans. By contributing a portion of your salary, your employer will also make the maximum matching contribution to your plan.

In Your 30s

Congratulations – you’ve made it past the ho-hum life of starting salaries and you’re beginning to enjoy some of the perks of stability in your career. However, the financial burdens of life such as home ownership, children, and medical expenses can take a serious bite out of the salary you earn. To get ahead in other aspects of their lives, many 30-somethings neglect to fund their retirements. Just as with younger employees, making the maximum contribution to employer-matched retirement plans makes smart financial sense. If you own a Roth or Traditional IRA plan and have additional money set aside, you can continue making regular contributions to those plans. It is also possible to play catch-up on IRA contributions for previous tax years in some cases.

On average, U.S. employees have about $45,000 saved away in retirement plans by the age of 35 or so. Just like with younger employees, this can be a good start, but much of it depends on one’s salary. Many financial professionals suggest that a person should have the equivalent of a year’s salary socked away in retirement plans by this age. If that applies to you, you’re on your way to a comfortable retirement. Don’t start skimping on regular contributions to your plans, though.

A great way to begin to get ahead on retirement savings is by adopting a more aggressive approach to investing. 30-year-olds have the power of time on their hands; more risky investments can lose money, but short-term market downswings shouldn’t affect the long-range plan too drastically.

In Your 40s

When you reach the age of 40, chances are you have finally begun to earn a healthy paycheck. You’ve worked your way up the ranks in your company, and you’ve also probably eliminated the monthly drain of student loans from your expenses. Your house may even be close to being paid off, freeing up additional money for unforeseen financial challenges.

People in their 40s often have children ready to enter college. Car payments for yourself and your children may eat into your monthly budget as well. Still, there’s a solid chance that you may have some extra money at the end of each month.

What should you do if you find yourself with unexpected money? Invest, of course! Funding your IRA plans and your 401(k) should always be a priority, no matter what age you are. The surveys that look at average retirement savings by age suggest that 40-somethings have accrued about $63,000 in savings. This, according to many financial professionals, is dangerously low. At this point in life, a healthy retirement plan should have a minimum of $165,000 in contributions. If you find yourself behind the times, it is critical to get serious about catching up. If you don’t already have a Roth or Traditional IRA, it’s time to establish one and contribute the maximum annual amount permitted by regulation.

In Your 50s

Believe it or not, you’re getting close to that magic age of 65, the average age of retirees in America. You have enjoyed success in your career and your salary proves it; you’re making good money, your house is probably paid off (or close to it), and your children may be finally finishing college.

College tuition eats into monthly salaries, and medical expenses can drain even the most robust of bank accounts. That house you’ve worked so hard to pay off may need upgrades or expensive repairs as well. At this point in the average U.S. worker’s life, retirement savings have accumulated to about $117,000. This is far short of the $240,000 minimum recommended by retirement planning professionals.

One quick way of boosting retirement savings in your 50s is to consider downsizing your home. Selling your primary residence and purchasing something smaller can net considerable income, which can then be used to bolster your retirement plans. Cashing in company stock options or other investment products can also substantially cover any shortfalls in your retirement savings plans.

In Your 60s

At this point in your life, financial professionals suggest that you should have about six times your annual salary set aside in the form of retirement savings. Too few Americans hit that milestone, however. The average 60-something has only $172,000 in retirement savings. You’re in your final years of work, and retirement is looming. It may be too late to make up enough savings for a comfortable retirement. In fact, retirees are crowding the employment market, looking for jobs to cover the expenses of life after retiring from their careers.

If you are in your 60s, have a savings shortfall, and haven’t yet done so, NOW is the time to speak to a financial planner. He or she can help you discover ways of monetizing any assets you may have acquired over your career. Don’t forget government programs like Social Security and government-sponsored pension plans. These two plans may provide the missing money you need to enjoy your retirement well into the future.

Final Words on Retirement Savings

Planning for your retirement can come with many headaches and heartaches. While many of us are able to fund our retirement plans year after year and have seen our assets grow over time, too many of us are way behind when it comes to savings. It is never too late to start funding your retirement. Speak to a financial planner as soon as possible to develop a game plan that ensures you’ll actually be able to enjoy a comfortable, stable retirement.


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