If you’re behind on your retirement savings goals, it’s time to focus on catching up. 70% of workers say they are concerned that when they are ready to retire, Social Security will not be there to support them. Here are 5 tips for catching up on retirement savings – including a guide to retirement savings by age.
Five Tips to Increase Retirement Savings:
Automation. Create a retirement savings goal and stick to it by automating your savings. Have your employer direct deposit part of each pay into a retirement savings account. You can also set up recurring transfers from your checking to retirement savings accounts.
Retirement savings by age: What should you have saved by a certain age? Experts believe you should aim for an amount equal to your annual salary by the time you are 30 years old. For example, if you are earning $60,000 at age 30, you should have at least $60,000 saved in your retirement account. Here’s a quick guide.
• 30 years old – At least one times your annual salary saved
• 40 years old – At least three times your annual salary saved
• 50 years old – At least six times your annual salary saved
• 60 years old – At least eight times your annual salary saved
• 67 years old – At least ten times your annual salary saved
Catch-up contributions: Be sure to fully fund your retirement savings accounts, including the catch-up contributions. You can learn more about limits on contributions and benefits, as well as catch-up contributions, on the IRS website. Catch-up contributions allow workers aged 50 and older to save more for retirement. Taking advantage of catch-up contributions can significantly boost your retirement savings. Speak to your tax advisor to learn more.
Easy way to IRA: Make the most of your employer’s 401(k) match. If you don’t have access to a 401(k) at work, you can still save for retirement with a traditional IRA. You can also have an IRA in addition to your 401(k). Benchmark Federal Credit Union offers Individual Retirement Accounts (IRAs) with benefits including no minimum deposit to open, no setup fees, and no monthly or annual maintenance fees.
Consolidate and pay off high-interest debt to focus more on savings. You’ll save on interest and be able to budget more for retirement savings. Look into the various Benchmark Federal Credit Union loan options to help you achieve your debt consolidation goals.
Remember: The more your income increases over the years, the more you should be saving for retirement. Be sure to revisit your savings goals annually and adjust those goals to account for changes in your lifestyle.
Rebecca Worthington is the Vice President of Community Relations at Benchmark Federal Credit Union. The only federal credit union to exclusively serve Chester County, Benchmark FCU has been serving the community for more than 80 years and is known for providing extraordinary service. To learn more about the products and services available at Benchmark FCU, visit our website at BenchmarkFCU.org. Anyone who lives, works, worships or attends school in Chester County, PA is eligible to join Benchmark Federal Credit Union.