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Despite all the conversations of the US pension crisis, there are some encouraging news: a significant share of households with medium income-to-e earnings between 50,000 and 100,000 USDs annually-Express about 8% of their retirement revenue, states A Research Traveling in Real Life in Real Life.
With the match between the employer, this savings rate can increase to 12%, according to Jean Chatzky, host of Podcasta Her Money, putting it in a range of 10% to 15%, usually recommended by retirement experts.
“Do I want to see them up to 15%?” In a recent episode of retirement decoding (listening down), Chatzky asked. “Absolutely. We know that if you can save 15% in a really long period of time – decades, your work career – when you retire and combine your savings with social security, you will usually have enough to replace 75% on 80% of your revenue revenue before retirement .
All in all, the trend goes in the right direction.
This savings rate “is pretty good,” Chatzky said, especially in the light of other studies that have revealed that some people save only a small percentage of their revenue, sometimes in low one -core digits, and other individuals have less than $ 400 allocated for emergencies.
“When it comes to the pension crisis in this country … What tells me that number is that things may actually be turning,” Cetzky said.
Of course, even if you save 15%, it is useful to know how much you need to accumulate in your Egg Nest to finance your desired retirement standard, Chatzky said.
“Sometimes it’s hard to get ready if we don’t know where the target line is,” she said. “But many experts will suggest that when you withdraw, you have about 10 times a salary to retire.”
In other words, if your financial salary is $ 100,000, you will need a million dollars to retire, and if your salary is $ 200,000, you will need two million dollars allocated to retire.
“It takes a very long time to save that money,” Chatzky said.
But putting money to work through complex can make a big difference. When people think about their pension savings, Chatzky said many say they would like to start early.
According to Chatzky, automatic enrollment and automatic escalation have made it easier to save in plans 401 (K) and significantly increased their pension savings. Automatically enrollment, which enrolls employees in 401 (K) of its employer, unless it is excluded, has significantly increased the participation rate. And automatic escalation, which gradually increases contributions annually, helps employees achieve optimal savings levels.
“My favorite advice is to lean into technology,” Chatzky said.
French runner Barbara Humbert, 83, and her husband Jacques, look at the pictures on a computer screen in their home in Eaubonne near Paris, France, April 26, 2023 (Reuters/Gonzalo Fuentes) ·Reuters / Reuters
She noticed that, according to an an Aarp studyPeople are 15 times more likely to save for retirement when they have access to a workplace plan and 20 times more likely that their savings in the workplace is automatic.
“If you have a job plan, get into it,” she said. “Grab all the appropriate dollars that you can and take a page from an automatic escalation and continue to increase your contribution every time you get up until you get off. It’s a very, very best thing you can do.
In Podcast, Chatzky also emphasized the importance of maximizing all retirement accounts available, including Roth accounts, traditional IRA and 401 (K) S, Health Savings Accounts (HSA), necessary Iras, 529 plans and taxable accounts.
The main study found that 78% of Nenas still intend to save for retirement in the future. However, they cite high costs, low revenues and repayment of debt as primary obstacles that prevent them from saving them now.
“They are the right challenges,” Chatzky said.
Costs have increased significantly in recent years due to inflation, and while The inflation was moderatedPrices remain higher than a few years ago, making it difficult to buy a home or car to buy food.
In addition, although the salaries increased, they did not keep up with the cost of the living of some workers. At the same time, consumer debt is growing, and many people carry a holiday debt that they may not be able to pay off by 2025.
“Many people spend very fast and often very unconscious these days,” Chatzky said. “We have a lot of subscriptions. Let’s tap our cards and get our fingers and dip the cards without thinking about it. We use a single click on Amazon too easily, and as a result, our money goes through our fingers in a very, very fast way and not addressing so much attention. “
A way to turn this scenario, she said, working “back budget” what he does in herself Financefixx Training program in Hermoney.
“You look where your money goes and you break it into categories and ask yourself,” Where can I make some small but meaningful changes? “Chatzky said.
It can release some money every month that can be used, for example, to pay debt.
And as part of this exercise, you may find that you spend a lot more than you thought of food. Chatzky said meal planning is one trick that can make a big difference in saving money on foods.
Subscriptions are also a big culprit. “Average household during pandemies had 24 different subscriptions, and if you haven’t looked at them for a while, the chances are pretty good not to use at least some of them and you can cancel them,” she said.
“So pay some attention, make some changes and it will start taking you in the right direction,” she said.
And if you have not checked your credit score for a while and carry a debt with a high credit card interest, Chatzky said the improvement of the results could help you provide lower interest rates. Consider options such as transfers of balance sheet or debt consolidation to reduce interest costs and make repayment more controlled.
