Many Americans worry about whether they will have enough saved for retirement, and they may not even know how much money they will need to retire comfortably. Saving for retirement is not an exact science. Even the best laid out plans can be set back by economic swings and a volatile stock market; and savings can be drained by high inflation, unemployment, and unexpected medical bills and repairs.
According to a report from The Economic Policy Institute (EPI), “The State of American Retirement,” surveying people ages 32 to 61, retirement wealth increased as a share of personal income between 1989 and 2013. However, the increase was not enough to keep pace with an aging population, prospective Social Security cuts, and longevity risk.
The mean amount of retirement savings for all families in 2013 was $95,775.93, broken down by age range as follows:
- Age 32-37: $31,644
- Age 38-43: $67,270
- Age 44-49: $81,347
- Age 50-55: $124,831
- Age 56-61: $163,577
Those whose savings are more than the mean still may not have enough to retire on the 70% of pre-retirement income many experts feel is necessary to maintain pre-retirement lifestyle. If your savings are less than the mean, it’s a sign you need to reevaluate what you are doing.
The skilled and seasoned Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer understand that even the most well-intentioned people can find themselves in a financial hole during retirement. We offer a free consultation to evaluate your situation and help you remain financially secure.
Call one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) or email for your free consultation so we can determine what retirement solutions will work best for you.
Suggestions for Saving More for Retirement
Set a Target
Nationwide has a detailed calculator you can use to examine your current resources and income to determine how much you should save each month to reach your retirement goals. For example, a 32-year-old with $60,000 in gross income should be saving $978 a month if expecting to retire in 30 years on 80% of current income.
Utilize Your Savings Options
Contributing to your workplace retirement plan such as a 401(k) or a 403(b) plan is a great way to save, especially if your employer provides matching contributions. The maximum employee 401(k) contribution you can make for 2018 is $18,500. Those age 50 or older, can make an extra $6,000 “catch up” contribution into your 401(k), for a total of $24,500, which grows tax-free.
The most common employer match is a dollar-for-dollar match on the first 6% of income. If you make $55,000, the 6% match is worth $3,300 in free money from your employer.
If your employer does not offer a retirement plan, you can still set aside money from each paycheck for savings. If you are self-employed, you can make contributions to an IRA, which also grows tax-free. IRA contribution limits are $5,500 for savers under age 50 and $6,500 for those aged 50 and up, as of 2018.
In addition, there are some painless ways to increase savings, including:
- Saving excess when you get a raise
- Saving your tax refund and increasing withholding so refunds are higher
- Setting aside your bonus for savings
- Automating your savings, having a set amount of money automatically sent to your retirement savings account on a regular basis
Cut Your Housing Costs and Costs of Living
The general rule is to spend no more than 30% of your income on a mortgage or rent. If you are paying more, you should evaluate your options. Perhaps you no longer need so much space and can downsize to a less expensive home or apartment. You might be able to move to a less expensive neighborhood or even move to a less expensive area of the country.
In general, the south and Midwest are less expensive areas to live in than the coasts, and more rural areas are less expensive than big cities. Smaller homes will cost less for taxes, insurance, and utilities — another way to save.
Work More and Longer
Consider taking a side job like driving for a ride-sharing company or doing freelance work, and use that money for savings. You may wish to postpone retirement and work longer to increase your retirement savings and also boost your Social Security benefits. For every year past age 62 that you delay taking Social Security, up to age 70, your benefits increase annually by 8%. And if you are already retired, you can take a part-time job to supplement your income.
Say No More Often and Give up Bad Habits
Don’t sacrifice your own retirement savings because you are being tapped by family members for cash or loans. Let your children attend in-state colleges instead of more expensive ones, as long as they are getting a good education. Don’t be tempted to spend on luxuries and items you don’t really need or try to keep up with the Joneses. Consider taking more economical trips and eating in less expensive restaurants and doing so less often.
Changing these habits may require a mind shift, but examine your priorities, weed out expenses that are less important, and make a priority out of saving for retirement.
Contact Us for Help
The experienced and compassionate Ohio debt-relief attorneys at Fesenmyer Cousino Weinzimmer know how difficult it can be to change lifelong spending habits, and you may well benefit from professional help doing so. We offer a free consultation to evaluate your entire financial situation, to examine your income, your debts and your goals and help you find solutions that work best for you.
To learn more about how our firm can be of assistance, call one of our conveniently located office branches at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) or email for your free consultation so we can determine what solutions will work best for you.