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Only 24% of baby boomers reported that they are confident they will have enough savings to last through retirement in a survey conducted by the Insured Retirement Institute (IRI). This statistic has fallen from 36% in 2012. 41% of all boomers reported that they don’t have any money saved for their retirement. According to data from Vanguard, the average American age 55 to 64 has a 401(k) balance of $177,805 and only 1/3 of Americans with access to plans actually contribute to them. The often-used “4% rule” of retirement says that a retiree with this balance can only expect to withdraw approximately $7,100 per year from their account without worrying about running out of money. Even when combined with Social Security, this isn’t likely to be enough for most people. The median 401(k) for this age group is only $71,579, meaning that half of baby boomers with a 401(k) are below that number, not to mention the others with no retirement savings set aside at all.

Have You Fallen Behind?

It is estimated that baby boomers will need approximately $658,000 to live comfortably through retirement. So what can you do if you are behind the curve? Luckily, there is still time to control some of the damage of starting too late or not saving enough.

First, working a few years beyond retirement age allows for more time to build savings, less time to need savings (shorter retirement period), and a greater annual Social Security benefit (an 8% increase per year that you delay taking Social Security from age 62, the earliest age you can claim, to age 70). This is the solution most boomers, 52% will turn to when they realize their savings won’t be enough.

Retirement Saving Tips

If you have a 401(k) plan and are still working, consider increasing your contributions. For the 2017 tax year, you can choose to defer $18,000 of your salary ($24,000 if you’re over 50 years old) so chances are you could be saving more.

If you do not have an employer’s plan, you can contribute $5,500 to an IRA this year ($6,500 if you’re over 50 years old). This investment can go toward virtually any stocks, bonds, or mutual funds you want. By maxing out your IRA every year starting at age 50, if your portfolio produces a conservative 6% rate of return, you could build up a $150,000 account value by the time you’re 65.

It is also important that you eliminate debt before retirement. This will help increase your margin for savings, and will help stretch your budget longer. Budgeting and cutting back to put more money toward your debt now will help your savings later.

As you near retirement age, it is important to plan for your future properly. For more ways to protect your future, call 724-929-2300 to discuss a life insurance or medicare policy. Our agents will get a policy tailored to your needs at the best price.