I recently came across an article that gives you an idea of where you stand in preparing for retirement. It is “The Average Retirement Savings by Age” by Tim Parker. A 2015 Government Accountability study found that those between 55 and 64 have only $104,000 in retirement savings. That is far from enough to retire. This should be a wake up call for people at different ages.
20s
If you are in your twenties you have about $16,000 if you are in the median. That means have have more than half and half have less. Twentysomethings are dealing with student loans and starting salaries. It is hard to save a lot.
I advised a man in his 20s to put 10% of his income into a retirement fund. Then aim to make 10% a year on average. That would lead to a million dollar retirement fund in 40 years. I estimate that he has well over a half a million dollars now. He showed me his check stub and I saw he eally is putting away 10% and has been for 30+ years.
30s
If you are in your 30s you may have median savings of $45,000. Some of your issues are buying a house for example. It is hard to save when you have just bought house. Although if you are focused you can do a lot better than if you are not focused. Having clear wriiten goals make a big difference. My son is focused now on paying off his house early. He has a chart posted in the kitchen with a target date of 4 years. That is one of the smatest things he could do.
Pay early by paying 10% extra each month and make sure the extra is applied to principle not interest. Banks are known to make mistakes in this.
40s
The median savings for this group is only $63,000. This group is really behind. You may have student loans paid off now. If so put that money into retirement savings. Start an IRA if you don’t already have one. You can save money and save on taxes at the same time. It is time to step up your savings rate.
50s
This group should have about $240,000, but actualkly only has $117,000. An income of $60,000 should allow a higher savings rate. Put away as much as possible for retirement here. You may be near your peak earning years so take advantage of that.
60s
This group has a median savings of $172,000. That number may sound good but a $60,000 income would require about $360,000 to retire. You are getting close to that possible retire date so save as much as possible now.
I was in my 60s when we received some inheritance money. We saved almost all of it and paid off the mortgage too.
Also remember social security. To get the maximum you would have to make $106,000 and wait to age 70.. The average recently was $1368 according to an article in Motely Fool.
Bottom Line.
Remeber it is never too late to start saving for retirement. It is also never too early to start saving for retirement. So take action NOW no matter what age you are.