Retirement Worries: Are You Saving Enough?
Retirement planning is a big deal. It's not just about having money saved up. It's about making sure you can live the way you want to after you stop working. Many people struggle with this. In fact, less than half of Americans are on track to keep their current lifestyle in retirement.
Generational Challenges
Different generations face different challenges:
- Older Gen Z workers (ages 24-28): Nearly half are saving enough to maintain their lifestyle later in life.
- Baby Boomers: Only 40% are on track, but many own homes, which can be a safety net.
Key Considerations
To stay on track, consider the following:
- Current Savings: How much have you saved already?
- Future Savings: How much can you save in the future?
- Retirement Expenses: What will your expenses be in retirement?
Experts suggest saving 10 to 12 times your final salary. This should replace about 70%-80% of your pre-retirement living costs.
Saving Strategies
- Younger People: Save consistently to benefit from compounding.
- Close to Retirement: Consider catch-up contributions if you're lacking savings.
- Employer Match: Take advantage of it—it's like getting free money.
Managing Expenses
Managing expenses is crucial in retirement. Many retirees need to make lifestyle changes:
- Move to a smaller home or a cheaper area.
- Cut unnecessary expenses.
- Track your spending now to plan for the future.
Additional Support
Many older adults have little or no retirement savings. It's important to look into benefits programs that can help cover medical, housing, and food costs. Some retirees even work part-time to boost their savings. In 2024, about 1 in 5 people over 65 were working or looking for work.
