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Low Average Retirement Savings By Age: What To Do About It

July 3, 2018 by Steven C. Johnson, ChFC®

If you look at the average retirement savings by age, you might find them alarming. You may even come to the conclusion that Americans are facing a pretty dire situation. Just take a look at the median retirement savings of families by age, reported by CNBC:

  • 44 to 49: $6,200
  • 50 to 55: $8,000
  • 56 to 61: $17,000

That makes more sense when you consider 41% of Gen X, who range from their late 30s to mid 50s, and 42% of Baby Boomers, roughly late 50s to mid 70s, haven’t saved anything for their financial futures.

Even if these numbers are low and the reality isn’t this dramatic, it’s not a good sign. If you’re approaching the time when you may want to retire, you shouldn’t have less than six figures saved – and definitely not less than five!

These account balances are far too low to enjoy retirement or reach financial freedom. Assuming you don’t want to work the rest of your days, we need to do something to change statistics like these.

At the very least, you can take control and do something in your own life to make sure you don’t become part of the statistic.

Start Saving Now

The best thing you can do for yourself is to look at your own financial situation and evaluate what’s going on. Are you saving or investing at all?

If the answer is “no,” start. Start now. Don’t waste time or energy beating yourself up about where you stand from a financial perspective today. Just get in action:

  • Contribute to a retirement plan if you have one through work. Put in at least enough money to get the employer match for plans like 401(k)s or SIMPLE IRAs.
  • Use a Roth IRA and max that out each year if you’re eligible.
  • Build up a cash cushion or emergency reserve.
  • See what expenses you don’t need that you could cut to free up more money for savings.

These are good starting points, but it’s just the beginning. If your balances look like the average retirement savings by age, then you have some catching up to do – and saving cash alone won’t get you there.

Consider looking at how you can invest aggressively but strategically to get to where you need to be.

Investing in a Strategic Way Can Help Your Retirement Savings Catch Up

Saving is good, but it’s not enough because you won’t earn a significant return on your money this way. At best, you can earn about 1 percent through a bank savings account, or maybe up to 3 or 4 percent if you stick cash in something like a CD.

Even that, though, won’t be much help because the rate of inflation is about 3 percent. That means your cash will likely lose purchasing power over the years, leaving it worth less than when you saved it.

Considering this, stockpiling cash likely won’t be enough to get you ahead of the average retirement savings by age. To do that, you need to get serious with your investments and look at how you can maximize your money.

There are countless options available to you, and the best approach will depend on a few key factors:

  • Where you are today versus where you want to be in the future, and how big the gap actually is between those two places.
  • How much risk you can handle (and remember, there’s a correlation between risk and reward: if you need to catch up on building your nest egg you might want to take bigger risks to enjoy higher returns).
  • Whether or not you’re doing this all yourself or if you’re working with a professional to help guide you as you go.

Make Small Tweaks Now, Enjoy More in the Future

You don’t have to sacrifice everything you enjoy today. But it might be worthwhile to look at your current expenses, and ask yourself if there’s anything that you need to change.

This doesn’t mean stop spending. It means look for simple ways to reduce how much money goes out the door. Switching gym memberships, canceling subscriptions you don’t use, buying generic instead of brand name – these are all tiny things that, together, can make a significant and positive impact on your monthly budget.

Don’t forget that the fewer expenses you have now, the easier it will be to reach a point where you can quit working and do what you want. You won’t need to save as much if you’re not spending as much.

If saving more just isn’t going to work for you, working longer might be necessary – but “longer” could only mean a few months longer than you initially planned. Many people find this is a workable trade off if it means they get to maintain the lifestyle they want.

Assemble Your Team

That’s a lot of what financial planning is about: finding the best ways to maximize the resources you have, be they time or money, to live the way you want today, tomorrow, and decades from now.

It’s not necessarily about sacrifice. It’s about looking strategically at your finances, avoiding mistakes, and making the most of your opportunities. It may be tough to get the perspective you need. That’s why the most financially successful people don’t just try to do everything on their own. They work with a team of experts who provide guidance.

Get a second set of eyes on your financial situation and don’t let any opportunities pass you by. You don’t want to be the person who’s stuck working years longer than necessary. You can avoid this by having a plan and taking it seriously.

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Eric C. Jansen, ChFC

Fun Facts About Me

When he is not researching the next great stock to add to client portfolios, you can find him travelling frequently with his family to Jackson Hole Wyoming.

  • Hometown: Chicago, IL
  • Birth Month & Year: November, 1964
  • Favorite Hobby: Goldmining in Nome, AK
  • Favorite Food: Steak at Charley’s Steakhouse in Orlando FL
  • Can't be interrupted when: Watching the Discovery Channel
  • Hidden Talent: Finish Carpenter
  • Something on bucket list: Obtain Helicopter Pilot License
  • Family Pet: Goldfish

Steven C. Johnson, ChFC

Fun Facts About Me

Steve would tell you that one of the best parts of the day is spent talking to clients and relationships that result from it. When away from the office, he loves to travel the back roads of New England enjoying all the great sites that can be found off the beaten path.

  • Hometown: Townsend, MA
  • Birth Month & Year: December, 1967
  • Favorite Hobby: Playing Hockey
  • Favorite Food: Chicken Caesar Salad
  • Can't be interrupted when: Watching the Bruins
  • Hidden Talent: Cooking – Makes a great Thanksgiving turkey
  • Something on bucket list: Travel to Italy and Greece
  • Family Pet: Max – our Pomeranian

Frederick M. Lane, ChFC, CASL

Fun Facts About Me

When not managing client portfolios, Fred can be found relaxing with family and friends.

  • Hometown: Nutley, NJ
  • Birth Month & Year: July, 1954
  • Favorite Hobby: Dog Walking
  • Favorite Food: Italian
  • Can't be interrupted when: Listening to Pink Floyd
  • Hidden Talent: Landscaping
  • Something on bucket list: Space Flight - Tourism
  • Family Pet: None

Catherine M. Gareri

Fun Facts About Me

When not caring for her clients Cathy enjoys relaxing in her yard at home.

  • Hometown: Bellingham, MA
  • Birth Month & Year: July, 1957
  • Favorite Hobby: Cooking and Entertaining
  • Favorite Food: Steak at the Capital Grille
  • Can't be interrupted when: It's family time
  • Hidden Talent: Dog Whisperer
  • Something on bucket list: Spending a couple months on the Almalfi Coast
  • Family Pet: In Between Mastiffs now so a little blue fish “Willy”

Katie E. Moore, CLTC

Fun Facts About Me

When Katie is not busy taking care of her clients, she spends her time being a mom to her two little ones, Owen and Isla.

  • Hometown: Modesto, CA
  • Birth Month & Year: September, 1982
  • Favorite Hobby: Swimming
  • Favorite Food: Mexican Food
  • Can't be interrupted when: I'm cooking
  • Hidden Talent: Climbed Yosemite's Half Dome, twice - no fear :)
  • Something on bucket list: See the Northern Lights and Potty Train my 2 year old
  • Family Pet: Caddy and Sierra – our two cats

Hesper Duval

Fun Facts About Me

Loves spending time with 2 daughters and enjoys participating in 5k obstacle races throughout the year.

  • Hometown: Charlton, MA
  • Birth Month & Year: October, 1981
  • Favorite Hobby: Running
  • Favorite Food: Cheesecake
  • Can't be interrupted when: Reading a good book
  • Hidden Talent: Interior Design and furniture restoration
  • Something on bucket list: To travel cross-country in an RV
  • Family Pet: Charlie and Nora, both black labs from the same litter

Donna Fournier

Fun Facts About Me

When not cheering for the Patriots, Donna spends her free time travelling throughout the United States looking for new haunted places to explore. She loves to wear her cowboy hat and boots when travelling out west.

  • Hometown: Swansea, MA
  • Birth Month & Year: February, 1961
  • Favorite Hobby: Exploring haunted locations
  • Favorite Food: Pizza
  • Can't be interrupted when: Eating my pizza
  • Hidden Talent: Rollerblading
  • Something on bucket list: Travel to Australia
  • Family Pet:  Had a pet skunk

Danielle Drew

When Danielle does not have her head in a book studying to expanding her financial planning knowledge, she enjoys anything active and outdoors, including visits to the beach and hiking.  

  • Hometown: Dennis, MA
  • Birth Month & Year: November, 1985
  • Favorite Hobby: Working out, concerts, and exploring wineries
  • Favorite Food: Lobster pot pie, cheeseburgers, BBQ, the list goes on...
  • Can't be interrupted when: Working out 
  • Hidden Talent: Country line dancing
  • Something on bucket list: To hike the 48, 4000 footers of New Hampshire
  • Family Pet: none, hopefully a big dog someday

Jay Willwerth, ChFC

Fun Facts About Me

Jay’s days are spent helping clients achieve their financial goals, followed by nights and weekends typically watching his daughters play competitive volleyball.

  • Hometown: Melrose, MA
  • Birth Month & Year: September, 1959
  • Favorite Hobby: Golf
  • Favorite Food: Anything at a Patriot’s Tailgate
  • Can't be interrupted when: Watching the Patriot’s Game
  • Hidden Talent: Competitive Volleyball Watcher (Mostly his 2 daughters)
  • Something on bucket list: Play a round of Golf at Pebble Beach
  • Family Pet: Bella, our Shih-poo
 

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