Did you know that the average retirement savings for families between the ages of 32 and 37 is $31,644? According to the Economic Policy Institute, a family in their thirties averages less than $35,000 in retirement funds. To put that into perspective, the Bureau of Labor Statistics data states that households run by someone 65+ years old spends on average $45,756 per year. It doesn’t take a rocket scientist to figure out the problem with that. Not many people, outside of the financial industry, are aware of this issue that needs to be shared.
Money well earned, but not well saved
Most people don’t make retirement savings a priority until they are in their fifties, but unfortunately that is too late. Most people spend their whole lives working hard to make a living in hopes that one day they will be able to slow down, play with the grandchildren, travel the world, or do whatever else their hearts desire. Sadly, people don’t give retirees vacations, water, or electricity that is free of charge. While the government will pay back your contributions to social security, it is not enough to live off of and there is no guarantee that social security will be here in 30-40 years (that’s a topic for another day).
Welcome to: Retirement Savings 101
Since I have been a part of the financial advising industry, one of the most common things that I hear is: “I wish I would have known to save for retirement when I was young” or “I wish I would have started saving earlier”. What most people don’t understand is that it is not difficult to accumulate a large sum of money. It just takes consistency and discipline. An easy place to start-- your 401(k).. Contribute to your 401(k) each month, especially if your company is matching part of it. Put a small portion of your paycheck into an IRA. If you start young, you won’t have to worry about catching up when you’re older. Making a decision to save for retirement while you’re young provides you a better chance to stick to your plan when things get hectic. As your family grows and your children get older, you will already have the discipline needed to continue saving because you have already been doing it for so long.
You are working extremely hard every day at your job, in whatever field it may be, and sometimes life gets too busy to think about finances, especially when taking care of a family. The good news is, it’s never too late to start saving for retirement, but it will take more commitment the longer you wait. Remember the two biggest rules we use when it comes to retirement savings is:
1. Now is better than later.
2. More is better than less.
So What Now?
If you are young and still have the opportunity to be better than the average person, then what are you waiting for? If you’re a person that I mentioned earlier, who wishes you started earlier don’t let someone you influence make the same mistake. Share this message with them, so that they can be on the right track to a thriving retirement.
This article courtesy of Rob Harper. If you liked this article and would like to learn more, sign up for his monthly newsletter HERE.