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so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: NewtonMP2100
Date: July 10, 2019 11:51AM
....have you/did you save enough.....as per this formula [ by age ].....??

.....most have not....


The Average Retirement Savings by Age

.....If you're like the majority of people, you probably need to step up your retirement-saving efforts. An October 2017 Government Accountability Office (GAO) analysis found that the median retirement savings for Americans between age 55 and 64 was $107,000. The GAO notes this sum would only translate into a $310 monthly payment if it was invested in an inflation-protected annuity.

Household savings in all retirement accounts have dramatically increased since their pre-recession levels including among Millennials ($9,000 in 2007 to $36,000 in 2017), Generation X ($32,000 to $71,000), and Baby Boomers ($75,000 to $157,000), according to a September 2018 report from the Transamerica Center for Retirement Studies.

Let's look at what people in various age groups have saved for retirement and how it stacks up to what the experts recommend.

Twentysomethings

If you're in your twenties and just starting out in your career, your paycheck probably reflects that fact. You're also likely to be carrying a good amount of student-loan debt. The average monthly student-loan payment for someone in their 20s was $393, according to 2016 data from the Federal Reserve Bank of Cleveland. High levels of debt combined with an entry-level salary help explain why the average twentysomething has an estimated median amount of $16,000 socked away, according to a 2015 survey by Transamerica.

On the bright side, those in their 20s should have around 40 years before they retire, which is a lot of time to make up a shortfall. The single most important thing to do is to contribute to your employer-sponsored retirement plan, such as a 401(k) plan or 403(b) plan. You can contribute up to $18,500 in 2018 and up to $19,000 in 2019.

Investment management firm Fidelity recommends that you put aside at least 15% of your pre-tax income a year for retirement. If you can't realistically save 15% of your salary, save as much as you can, and make sure you save enough to get the full benefit of your company's matching contribution if one is offered. Don’t turn away free money.

Thirtysomethings

If you're in your 30s, you’ve likely moved up the ranks at your company or you’ve gained enough experience to get out of those entry-level pay grades. But life may be more complicated now. You might be married, have a few kids, maybe a home and you're likely still paying off your student loans. With everything from the mortgage to soccer cleats to that unexpected car repair taking a bite out of your paycheck, saving for retirement may fall by the wayside.

Transamerica data shows thirtysomethings have a median $45,000 saved. Depending on your age and annual salary, you might be OK. According to Fidelity, you should have about the equivalent of your annual salary saved as a nest egg at age 30, twice your salary at age 35 and three times your salary by the time you exit your 30s.

To reach these goals, it is a good idea to tighten up your family budget where you can and try to increase the percentage of your salary that you're saving annually if at all possible. If you haven't started saving yet, you will need to save a higher percentage of your annual income. For instance, if you don't start saving until you are 30, Fidelity recommends you put aside 18% of your salary a year, while someone starting at age 35 should try to save 23% a year. Putting aside nearly a quarter of your income for retirement is a tall order for anyone with monthly bills and debt, and this underscores the importance of saving early.

Finally, don’t be too conservative with your investing choices. You’re still young enough to weather big market downswings because your portfolio has time to recover.

Fortysomethings

If you’re in your 40s, you're probably in the prime of your career. You’ve paid your dues and now, hopefully, you have a salary that reflects that. With any luck, you’ll come to the end of those student-loan payments sometime in this decade, freeing up more money.

But the house is bigger, the kids are older and may need help buying a car or paying for school, and if you’re honest, you might be blowing money on things you could do without.

Statistically, most Americans are dangerously behind at this point, with an estimated median savings of only $63,000. Remember that Fidelity recommends that you have three times your annual salary saved by the time you reach 40. So, if you’re making $55,000, you should have a balance of $165,000 already banked. At age 45, it is recommended you have four times your annual salary saved and six times that level by the time you reach 50.

If you are behind (and even if you're not), you should try to max out your 401(k) contributions. If you don’t already have an IRA, start one and try to max that out as well. The amount you can contribute to an IRA is $5,500 in 2018 and $6,000 in 2019. To reach these goals, consider putting any raises you get toward retirement savings. And if you no longer have student-loan payments, commit those sums to your nest egg as well.

Fiftysomethings

If you're in your 50s, you're nearing retirement age but still have time to save. You also might be paying your children's college tuition, helping with car payments, gasoline and any number of other expenses. The house may be getting older and need fixing up, and your medical bills are almost certainly rising.

The estimated median savings of fiftysomethings is about $117,000 – far shy of the desirable six to eight times annual income that Fidelity recommends.

If you are over 50, you can contribute an extra $1,000 a year to your IRA and an extra $6,000 a year to your 401(k) or 403(b) in what is known as a catch-up contribution. Besides taking advantage of catch-up contributions, consider downsizing by selling your home and collecting any appreciated value. If you have company stock options or other assets, don’t forget to consider those as part of your retirement balance, even if they don’t sit in a retirement account. Consider meeting with a financial planner, especially one who specializes in retirement, to get things in order.

Sixtysomethings

This is typically the decade when you begin to reap the rewards of decades of saving. By the time you reach 60, you should have eight times your annual salary saved, according to Fidelity, while those who are 67 should have 10 times their salary saved.

Unfortunately, Transamerica reports the estimated median savings for sixtysomethings is $172,000. At this point, it’s harder to save enough to make up for any shortfall. If you are behind on your savings, take a hard look at your assets and see what can be monetized at some point to help sustain you.

This is also the decade you can start receiving Social Security benefits. Most seniors find this to be a significant source of monthly income. The average monthly benefit for a retired worker in 2018 is $1,413 per month.

The Bottom Line

The amount needed for retirement is different for everyone. Nevertheless, there are benchmarks you can try to hit at every decade of your life. It's never too early in your career to put a plan together, but it's never too late to start, either.



do you have enough..........?!



_____________________________________

I reject your reality and substitute my own!



Edited 2 time(s). Last edit at 07/10/2019 11:59AM by NewtonMP2100.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: cbelt3
Date: July 10, 2019 12:31PM
I've got a couple of pensions. Social Security. A 401(K). A family trust fund.

And if all else fails I've got a .357 .
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: Ombligo
Date: July 10, 2019 12:33PM
It is important that you do not think of net worth as retirement savings. I know a couple who were bragging that they had a million dollars for retirement - then it came out that they were including both the equity in their home and value of their life insurance policies. Remove those from the picture and they were closer to $100k of actual savings

Neither should figure into retirement savings as they are not truly liquid. You can sell the home but will just need another (true, you can sell a $500k house and move into a $25k single wide, but few would) and the value of life insurance is only going to help the survivor, and that may not be when you need it. There are investment options with life insurance, but cashing out can be a serious mistake.



“No persons are more frequently wrong, than those who will not admit they are wrong.”
-- François de La Rochefoucauld
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: pdq
Date: July 10, 2019 12:47PM
Quote
Ombligo
It is important that you do not think of net worth as retirement savings. I know a couple who were bragging that they had a million dollars for retirement - then it came out that they were including both the equity in their home and value of their life insurance policies. Remove those from the picture and they were closer to $100k of actual savings

Tom Selleck is happy to talk to them about reverse mortgages.



Dear Kids - remember that part about your inheritance? We were only kidding...
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: Forrest
Date: July 10, 2019 12:55PM
Add in non-retirement savings, Social Security and a pension (for some of us) and you'll find many people DO have enough to retire in their 60's. This retirement 'crisis' doesn't exist for many people.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: NewtonMP2100
Date: July 10, 2019 12:55PM
....maybe just the 'younger' generation......??



_____________________________________

I reject your reality and substitute my own!
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: DeusxMac
Date: July 10, 2019 01:12PM
Quote
Forrest
Add in non-retirement savings, Social Security and a pension (for some of us) and you'll find many people DO have enough to retire in their 60's. This retirement 'crisis' doesn't exist for many people.

There's the critical point; how many is "many"?

In a country of 328,000,000 people, just 10%* would be 32,800,000! That IS "many", but it would still mean that 90%* do NOT have sufficient retirement savings.

*Arbitrary percentages to demonstrate that "many" is too vague for evaluation.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: JoeM
Date: July 10, 2019 01:17PM
Quote
pdq
Quote
Ombligo
It is important that you do not think of net worth as retirement savings. I know a couple who were bragging that they had a million dollars for retirement - then it came out that they were including both the equity in their home and value of their life insurance policies. Remove those from the picture and they were closer to $100k of actual savings

Tom Selleck is happy to talk to them about reverse mortgages.



Dear Kids - remember that part about your inheritance? We were only kidding...

And HE trusts them, he says it in the commercial. So what could possibly go wrong?



JoeM
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: mikebw
Date: July 10, 2019 02:32PM
HE just trusts that they will pay him for doing the commercial. Thanks.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: rz
Date: July 10, 2019 03:10PM
Quote
Forrest
Add in non-retirement savings, Social Security and a pension (for some of us) and you'll find many people DO have enough to retire in their 60's. This retirement 'crisis' doesn't exist for many people.

I do and will have enough to retire in my 50's.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: TLB
Date: July 10, 2019 03:22PM
My plan has always been to get a pay raise when I retire and keep pace with inflation for 15 years thereafter. It is still numerically possible, but I'm not counting on it.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: testcase
Date: July 10, 2019 04:00PM
"You can contribute up to $18,500 in 2018 and up to $19,000 in 2019. "



How many jobs pay young workers SO much that said workers have almost an "extra" $2000+ / month to put into savings? dunno smiley
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: Forrest
Date: July 10, 2019 04:24PM
I retired the beginning of January - in my late 50's.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: Ammo
Date: July 10, 2019 07:15PM
Another wake-up call to me was realizing that money I pull out of my Traditional IRA is going to be taxed (duh): in other words, I don’t have as much for retirement as I thought.

And how will Required Minimum Withdrawals affect my tax situation when I’m seventy and a half?



Be kind, for everyone you meet is fighting a battle you know nothing about. —Wendy Mass

Until you make your unconscious conscious, it will direct your life and you will call it fate. - Carl Jung
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: NewtonMP2100
Date: July 10, 2019 07:20PM
...Will you still need me, will you still feed me
When I'm sixty-four......
???



_____________________________________

I reject your reality and substitute my own!
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: Forrest
Date: July 10, 2019 08:44PM
Ammo,
You can convert a traditional IRA to a Roth IRA when you are 59 1/2 to 70 1/2 with no tax penalty. If you are retired during this period, your tax rate will be low. Lots of good advice at http://www.early-retirement.org/forums/
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: Michael
Date: July 11, 2019 05:46AM
Quote
Ammo
Another wake-up call to me was realizing that money I pull out of my Traditional IRA is going to be taxed (duh): in other words, I don’t have as much for retirement as I thought.

And how will Required Minimum Withdrawals affect my tax situation when I’m seventy and a half?

RMD's are likely to be changed to 72 (https://www.forbes.com/sites/leonlabrecque/2019/04/09/bigger-iras-proposed-new-tax-law-may-let-you-build-a-bigger-ira-in-retirement/#7cb1e292d3eb).

But, the bigger issue for those of us approaching substantial RMD's (I'm almost 66) is that tax rates are likely to change back to pre-2018 rates at the end of 2025 when we're taking RMD's.

It's easy to get a sense of the impact of the change by using a 2017 tax calculator and then a 2019 tax calculator with your anticipated income. For us, we have pensions and Social Security. Our Teacher Retirement pensions are legislatively mandated to go up at 3% (or higher if inflation is higher-we'll see how many more years the legislature lets that go on!) and Social Security has been averaging about a 2% increase over the last decade. If I add in the RMD's of our IRA's using a RMD calculator I can anticipate our income at particular years.

When I put our anticipated 2025 income into a 2019 tax calculator (since I'm betting there won't be a significant change in the current tax law) and then our 2026 income into a 2017 tax calculator (that will be the appropriate calculator if the current tax law expires at the end of 2025) I find that our taxes will be a LOT higher in 2026 than in 2025.

The way to (kind-of) beat that is to convert our IRA's to Roth IRA's before the tax law changes. That will increase our taxes a lot for the next 6 years but when the tax law changes all of our income will be pension and Social Security and so, even though our tax rate will be higher, the actual extra tax paid is half as much as if I had to include the RMD's from the IRA's.

Of course, if you convert IRA's to Roth IRA's you have to pay taxes on the amount converted. The financial consensus is that it doesn't make sense to use the IRA proceeds to pay the tax but rather to use other non-IRA assets to pay the additional tax. So, you've got to have other non-IRA money for this to make sense.

If you want to play with this, here are calculators:

2017 tax calculator: [www.mortgagecalculator.org]

2019 tax calculator: [www.ameriprise.com]

RMD caclulator: [www.schwab.com]
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: S. Pupp
Date: July 11, 2019 10:42AM
Student loans will be paid off at age 67, at which point I can start saving for retirement.
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Re: so old and TIRED?!.....average reTIREment savings [ by age ].......
Posted by: dk62
Date: July 11, 2019 12:29PM
I would like to see estimates of retirement needs from someone other than the companies benefiting from retirement investment accounts.
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