American companies are spending billions in employees’ retirement contributions just in order to maintain their financial well-being during the retirement days. However, new research shows that in spite of this massive investment, retirees are still not getting the intended results.
According to a study by HelloWallet, a provider of behavioral technology applications, though many people are nowadays contributing to 401(k) and other retirement plans than ever before, few are financially ready when they retire.
In a study, HelloWallet reported that in 2010 a regular worker nearing retirement had only 2 years’ worth of nest egg, which was certainly insufficient to cover for their retirement years and hence, delaying their retirements.
So the question that should be floating around in your head is why workers aren’t saving enough? Typically, it’s just because they’re preoccupied with things like paying off mortgage, auto loans, credit card, and other obligations.
The matter of debt has largely become oppressive for individuals nearing retirement. According to HelloWallet, while the monthly debt payments of an average aged person increased 9% during the years 1992 to 2010, it surged 69% for individuals aged from 50 to 65 for the same period.
As long as debt problems are there, retirement savings is undoubtedly a daunting task. It requires effective planning, careful assessment of your financial condition, significant household budgeting and most likely, a lifestyle change. Therefore, if your golden days are fast approaching, then you need to find out ways to reduce your living costs and make the most of your financial resources. That said, you can refer to this article titled “Retirement days: Cut your living costs and optimize your finances” for more retirement advice.
Set realistic goals
How do you want to spend your retired life? Do you want to explore the world? For many, retirement means an opportunity to pursue a hobby, spending beautiful time with family and friends, and see the grandchildren grow up.
Experts say that you need at least 70%-80% of your current annual income (including income from social security and other sources) to live peacefully during retirement. However, your savings is going to be the key here.
Based on your income and your savings, you can think about your dream retirement. However, the earlier you focus on it and start working, the better the chances you have to realize it.