Catching up on retirement savings

We often hear that the sooner we start saving for the future, the better, especially since retirement could potentially last for several years. Many of us find ourselves wondering if we’re doing enough to secure our future. The good news? Just being aware and concerned about your retirement puts you ahead of the game. It’s common to feel nervous about the future and the unpredictability of it, but with the right knowledge and strategies, it’s possible to take control of your financial destiny and build a comfortable nest egg for your golden years.

How to determine if you’re behind on retirement savings

More than half of Americans think they’re behind on their retirement savings. If you can relate, it’s a good idea to take a closer look at your current savings portfolio to review estimated expenses, retirement timeline, and how much is saved. On average, experts say retirees need around 70 to 80% of pre-retirement income to live comfortably, but this number can change based on personal goals and lifestyle. Even if the amount of savings is behind where it should be, there are actions that can be taken to bulk up funds for the future.

To help determine a target amount, remember that most households often spend less in retirement, so while savings might not be on par with a lifestyle now, it could be suitable down the road. Here are some questions to help determine if retirement savings are on track or if it’s time to play catch up:

•  How many years left until retirement?
•  How much do you plan to spend each year during retirement?
•  How much monthly income can be expected?
•  How many years do you expect to be in retirement?

Envision retirement and think if this amount could support those goals. Consider working with a financial professional to crunch numbers, evaluate options, and help determine the best path forward.

What happens if you have no retirement savings?

Without retirement savings, Social Security benefits are typically available, but these benefits often don’t fully replace pre-retirement income. potentially leaving individuals in a challenging financial position. Approaching retirement age without a savings strategy can jeopardize future financial security, so taking action now is essential for helping ensure a more comfortable retirement.

Age 40 and no retirement savings

For those in their 40s who haven’t begun saving for retirement, there’s still ample time to catch up. With a couple of decades likely left before retiring, it’s crucial to start building a diversified financial portfolio. At this age, it may be possible to choose options that take on more risk to potentially yield higher rewards. Additionally, diversifying a retirement income plan with a mix of stocks, bonds, and other assets can help balance risk while still working toward growth.

Adding an annuity to a financial plan can provide guaranteed income throughout retirement. This is also a good time to maximize contributions to retirement accounts like a 401(k) or IRA to significantly boost savings. The key is to start now and build a robust strategy that suits personal financial goals.

Age 50 and no retirement savings

For individuals in their 50s, retirement is on the horizon, so creating a retirement savings strategy is important to helping ensure there is adequate income for the future. Consider opening a 401(k) or IRA and start making catch-up contributions up to the maximum amount each year. Review and diversify investment options to balance growth and risk as retirement approaches. Also consider paying off debts, downsizing, or making other lifestyle changes as children grow up and become financially independent.

Age 60 and no retirement savings

With retirement arriving, there is less time to build an ample nest egg, but there are still steps that can be taken to improve financial stability. You might need to review the budget closely to assess current expenses and adjust spending habits to free up more funds for savings. It may make sense to keep working to continue to build retirement savings until more income is accumulated. Additionally, consider exploring part-time work or freelance opportunities to supplement income while contributing to retirement accounts. Consulting a financial professional can help create a targeted plan to maximize available resources and prepare for a more secure retirement. Taking action now, even in small steps, can make a significant difference.

How to catch up on retirement savings

Whether a person is starting from scratch or re-evaluating their retirement portfolio, there are options to build savings to help achieve a fulfilling retirement.

Maximize company match

Take full advantage of employer-sponsored retirement plans by contributing enough to receive the maximum match, effectively boosting savings without additional out-of-pocket costs.

Increase contribution amount

Gradually raise the percentage of income contributed to retirement accounts to accelerate savings growth and take advantage of compounding interest.

Secure guaranteed income

Consider options like annuities that can provide a steady stream of guaranteed income during retirement, helping to ensure financial stability. Some fixed index annuities can even provide guaranteed income for the rest of a retiree’s life.

Use cash value from life insurance

Permanent life insurance policies with cash value can be used to supplement retirement income while still keeping the death benefit for loved ones secure.

Automate savings

Set up automatic transfers from checking to retirement or savings accounts to ensure consistent saving habits, making it easier to build savings over time without extra effort. Feeling anxious about a late start on retirement savings is understandable, but it’s never too late to take action. The key is to remain proactive and committed to developing a plan that aligns with personal financial goals. No matter a person’s age or income level, meeting with a financial professional and taking steps today can help improve confidence in the journey toward a comfortable retirement.

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The term financial professional is not intended to imply engagement in an advisory business in which compensation is not related to sales. Financial professionals that are insurance licensed will be paid a commission on the sale of an insurance product.