What is National Retirement Security Week?
Around half of households ages 55 and older have no retirement savings1 and many of those are saving much less than they need. So, every year Oct. 15-21, National Retirement Security Week aims to improve financial literacy by educating workers about the importance of saving, how to save and their retirement options.
How retirement planning helps secure your future
Saving for retirement is an important part of creating security in your financial future. Planning early and reviewing often helps to create a steady income when you are no longer working. The average monthly payment through the Social Security Administration is $1,1772, but many people cannot afford to live on that amount. Retirement savings can provide some peace of mind when the time comes. An adequate retirement amount varies by person, but should be enough to cover the retirement lifestyle that you desire. There are many ways to save for the future, including using an IRA, 401k, annuity or other interest-bearing savings account. Along with the numerous long-term benefits, an additional benefit of saving for retirement now is that it may lower your current taxable income.
How to save for retirement
Though there is no exact amount for how much everyone should save for retirement, most of the principles for saving are the same regardless of the amount. The best way to ensure that you are saving enough is to think about your end goal and create a saving strategy by using a calculator to identify your needs. Consider how much you plan to spend each year in retirement to live comfortably and how early you will retire so you know how long your money should last. Once you know how much you need and have factored in how much you already have, you will start to get an idea of how much you need to save each month.
There’s no one “right way” to save for retirement, but it is important that you understand your retirement options to help create security for your future plans.
1U.S. government Accountability Office (2015, May 17). Web page: Retirement Security – Many Households Approaching Retirement Have Low Savings. Retrieved October 11,2017, from http://www.gao.gov/products/GAO-15-419.
2 Internal Revenue Service (2017, September 29). Web page: Retirement Topics – Benefits of Saving Now. Retrieved Oct. 11, 2017, from https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-benefits-of-saving-now.