INTRODUCTION
Welcome to Cortburg Speaks Retirement
An audio podcast about investing in the stock market, financial planning, money management and retirement planning. Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.
Now here is your host, Miguel Gonzalez.
HOST
Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.
On this week’s audio podcast, I share a few ideas to be a super saver for retirement.
The Federal Reserve recently released data showing the average retirement savings by age in the U.S. for 2019 to 2020—and the results may surprise you.
The savers with the highest average balance are those ages 55 to 64, with an average of over $221,000 saved, while those ages 65 to 69 have an average of just under $207,000 saved.1 Those ages 45 to 49 are slightly outpacing their Gen X brethren who are between 50 and 54, at $149,000 and $146,000 saved, respectively. Other savers include:
• Ages 18-24: an average of $4,745.25
• Ages 25-29: an average of $9,408.51
• Ages 30-34: an average of $21,731.92
• Ages 35-39: an average of $48,710.27
• Ages 40-44: an average of $101,899.22
If you're behind your benchmark or have some catching up to do, there are a few steps you may wish to take to become a retirement super saver.
Allocate Raises to Retirement
For those saving in a pre-tax account like a 401(k) or 457, each dollar put toward retirement may have a proportionally lower impact on your take-home pay. For example, if you're having 20 percent of each check withheld in taxes, each $100 401(k) deduction may only "cost" you about $80 in pay. Because of this, allocating at least a percent of each raise or pay increase you get may have little to no impact on your take-home pay while quietly increasing the amount you send to your retirement plan.
Having these increased contributions deducted from your check without even seeing them may also give you more flexibility if you need to cut expenses. You can have a near-instant increase in take-home pay by cutting back or suspending your retirement contribution.
Look at Asset Allocation
Everyone's risk tolerance is different, and if you're getting close to retirement, you may not be comfortable with a stock-heavy allocation that’s a higher risk. But a major part of retirement savings is getting the highest growth and stability mix possible with both your current and future funds. The old rule of thumb was to have 100 minus your age in stocks and the rest in bonds or another stable asset. However, this method has come under fire with low interest rates and lackluster bond performance in recent years.2
A financial professional may help by reviewing your portfolio and working to better align your asset allocations to reflect your retirement goals and timeline adequately. The proportion of assets you have in equities, bonds, real estate, and various other asset types often depends largely on your specific financial circumstances.
Increase Your Income
The "Great Resignation" has left a record number of job openings, which means that commanding a higher income may be easier than it would have been even a year ago.3 Take advantage of free salary websites to see if your salary is within market ranges. If it's been a while since you had a significant raise, now may be the time to pursue it. Increasing your income may be one of the most straightforward ways to increase your retirement savings while still enjoying an overall rise in take-home pay.
Make sure to visit our website, www.CortburgRetirement.com. Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances. As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.
This is Miguel Gonzalez, Certified Retirement Counselor (CRC) and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.
DISCLOSURES
Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision.
All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
CRC conferred by The International Foundation for Retirement Education.
Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.
Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.
Investing involves risk including possible loss of principal.
