BY J. KIMBERLY CANTWELL, MODERN WOODMEN OF AMERICA
John and Linda didn’t have a lot of money to set aside while paying the mortgage and raising a family. Now that their kids are grown and the house is paid off, they’re concerned they may not have saved enough to retire in 10 years. Estimating how much money you’ll need in retirement – and figuring out how to save it – can be complex and confusing. Fewer than half of Americans know how much they should be saving, according to the LIMRA Secure Retirement Institute. Most workers are saving too little or nothing at all.
Though LIMRA recommends saving a minimum of 10 percent of your income annually, four out of five workers are saving less. The average rate of saving is only six percent, LIMRA reports, leaving almost a third of pre-retirees (workers ages 55-70) with less than $100,000 for retirement. More than a third have less than $25,000. If you’ve fallen behind, catch-up contributions may help get your retirement savings back on track. Provisions in the IRS tax code allow people over age 50 to set aside extra money each year in certain savings plans, including 401(k) accounts, on top of normal contribution limits.
To read more, pick up a copy of the November/December issue of LiveIt magazine.