Retirement when you are young
Retirement can stir up various emotions for different people. Some find it comforting while others are terrified at the loss of income. New data suggests that many Americans don’t have near enough put aside for retirement at their respective age. Most adults have substantially less saved than needed for retirement with some having none at all.
Ages 30-40 seem to the biggest shock for most. The average amount needed to retire on time ranges from around $31,000 in your early thirties to over $64,000 in your late thirties. A large portion of workers in this group have nowhere close to that put away and may struggle in the upcoming decades.
The amount saved also varies quite a bit by location. People in the Midwest and Northeast take part in retirement plans such as 401k whereas the residents in the West and South are less likely to take part. The Midwest and Northeast also have better access to these programs than those in the West and South.
Marital status is also a great push for more retirement savings. Married couples are about 20% more likely to contribute regularly to their retirement savings that single people. Government employees also rake in the benefits due to having higher access to retirement plans which can even set them up for early retirement.
Though retiring young may seem like a dream to some, Investment Zen has some recommendations to help grow your retirement savings. The first step is to see if your employer offers a 401k plan. If they do, take advantage of it. If they don’t offer it, you can still sign up for an IRA or Roth IRA as well.
Trinity did a study that established a 4% rule that can help you decide how much to save. To make this work, you should plan on withdrawing 4% of your funds yearly after retirement. If you want $40,000 a year, plan on saving $1,000,000 to retire on.
Now, when you are still young, go to work and enrich your life. Nothing is for free. You have to earn every penny.