Start early and regularly evaluate your plans to stay on track. (iStock)
Americans in their 60s According to a study by, a median of $ 172,000 saved for retirement Transamerica. However, workers of all ages estimate that they will need $ 1 million to be financially comfortable when they leave the workforce.
Reaching retirement age without being financially prepared can be devastating. Regardless of whether you are in your 50s 40sor younger or how much you’ve saved so far, now is the best time to start planning your retirement seriously. Make sure you plan accordingly to ensure a comfortable retirement.
Credibility can help you meet your retirement goals. With Credible you can refinance loans to save money or even Sign up for a free credit monitoring serviceThis can alert you to fraudulent activity, potential credit problems, and more.
4 Ways To Make Sure You Have Enough Money When You Retire
Are you approaching retirement and have a target date in mind? Here are some ways in which you can increase your retirement savings and look forward to years of financial security.
- Crunch the numbers
- Use tax-privileged retirement accounts
- Open a high-yield savings account
- Increase your retirement savings every year
1. Crack the numbers
While $ 1 million can be considered a rule of thumb for how much you should have saved for retirement, your actual number will depend on how you plan to live during that time of your life. For example, if you have a relatively high income and want to maintain that standard of living after you finish, you may need to save more.
Also, if retirement is decades away for you, it’s also important to note that $ 1 million will not buy as much as it does today and you may need a lot more to meet your current savings goals.
There are several retirement calculators online that you can use to determine how much you will need to save each month to meet your retirement goals. Because planning includes many assumptions about inflation, taxes, management fees, and more, you should also seek advice from a financial advisor who can help you find the right strategy for your situation.
Use Credible as a guide to save. If you’re looking to hit your financial goals and need help getting started, Credible can help. Start by opening a high yield savings account.
2. Use tax-privileged retirement accounts
Most American workers have Access to a 401 (k) retirement plan through their employer, and anyone can open individual retirement accounts (IRAs). These retirement accounts have a special place in the tax code that allows you to take advantage of certain tax benefits when you use them to save for retirement.
For example, with a traditional 401 (k) or IRA, you can usually deduct your contributions from your taxable income, reducing your tax burden over the years you pay them. However, if you withdraw the money in retirement, the distributions are taxable. In contrast, Roth 401 (k) s and IRAs do not allow deduction of contributions, but your money grows tax-free.
Neither option is inherently better than the other. So you should speak to a professional to decide which one is better for you. In either case, however, it is better than using a regular taxable brokerage account.
3. Open a high yield savings account
High Yield Savings won’t do much for retirement. After all, their returns tend not to be high enough to offset inflation.
However, the interest rate on a high yield savings account is often very high higher than a traditional savings accountwhat can give you an advantage over the years. Even with interest rates lower than usual in 2021, you may still be able to earn interest at an interest rate ten times higher (or even higher) than what most accounts offer.
You can Explore high return savings options through Credible, an online marketplace.
4. Increase your retirement savings every year
As a rule of thumb, experts recommend earmarking at least 15% of your current gross income for retirement. But this number can also be higher or lower, depending on how much you have saved so far and what your expectations are for the future.
While 15% is a good goal for most people, getting there right away can be extremely difficult. So, if you have a retirement plan, consider increasing your contributions every year, or possibly even every time you get a raise. If your contributions increase over time, you have a better chance of being on the right track towards your goals.
The final result
Planning for retirement can be stressful, and it can be impossible to save enough to meet your age goals. But the sooner you start planning, the better your chances of getting where you want to be.
As you take steps to plan your retirement, you should seek help from a professional who can advise you personally and evaluate your personal finances over time. With Credible you can find free services like Credit monitoring or contact a professional over Refinance Your Mortgage or more.
And don’t forget to make sure you have the right accounts, be it tax-privileged retirement accounts, high-yield savings, or anything else that can make your money work harder for you in the years and decades to come.