The average retirement age in America is 63, and retirement lasts about 18 years. That means that you’ll need enough money to last you until you are 81 years old.
When you calculate your retirement fund, take into account all of your basic expenses, as well as health care and other items you might need or want. Unfortunately, many Americans between the ages of 55 and 64 have just 12 percent of what they need to be able to retire and survive securely and comfortably.
Retirement is not the same as it used to be years ago. Money doesn’t buy what it used to, and many people find it tough to save for a period of almost two decades. Add to this the growing inflation rate. According to the Bureau of Labor Statistics consumer price index, today's prices are 560.03% higher than average prices throughout 1970, meaning the real value of a dollar has decreased.
It’s impossible to accurately predict how stocks and bonds will perform over time, as there is always risk involved. You should be thinking about putting as much money away as you can. The IRS released new contribution limits of $19,000 for employees who participate in 401(k) plans this year which is $500 up from $18,500 in 2018. Your Individual Retirement Account or IRA also has been bumped up by $500 this year. Taking advantage of this is going to help you in the long run, as the more you save, the more you will have available to you down the line.
25 percent of Americans say that they have $200,000 or more set aside for their retirement. If you don’t have that much saved, you are not alone. The average overall for all Americans who are saving for their golden years is just over $84,000.
“That is not nearly enough, but it is better than nothing at all. If you are not actively saving, you need to start doing so, and now is a good time to start doing it,” says Michael Norton, Senior Vice President of David Lerner Associates.
Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.
To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.
Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable-- we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.
David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.