As a significant portion of Americans approach retirement age, fear and frustration over savings is hitting the boiling point. That’s why financial experts have long stressed the need for retirement savings benefits assess. Nathan Sebesta, a certified financial planner and owner of Access Wealth Strategies, is one such expert. Even worse, more than half of Generation X (ages 45 to 60) have retirement savings equivalent to only three years’ worth of their current income. Advocates encourage these players to reconsider their investment plans.
There isn’t a single magic number that ensures a comfortable retirement. Rather, the baseline amount that one needs can differ widely depending on lifestyle, where you live, and more. In reality, it may vary by as much as $1.49 million based on retirement location. This gap underscores the importance of people to create individual retirement savings strategies that address their unique situations.
Sebesta notes that many Americans find themselves in challenging positions, especially those with only a decade or so before retirement. For any aspiring retirees, he pushes savings, reducing discretionary spending, and downsizing one’s lifestyle. He advocates for moving to cheaper places, in order to achieve a long-term, solid financial future.
If you have only 10 to 15 years left to pay, that’s when you want to pivot and start paying down the debt. You do have to try to get to a place where you could comfortably live on less in retirement, said Sebesta.
They recommend that people save six times their expected annual income by age 50, if not sooner, with a goal of retiring at 67. That’s why this benchmark should be an aspiration for anyone working toward a secure and comfortable retirement.
Moreover, postponing the initiation of Social Security benefits can provide a major boost to economic security in one’s later life stages. For each year you delay taking Social Security benefits until the maximum age of 70, your payments increase by about 8%. Individuals born after 1960 could potentially see their benefits increase by up to 24% by waiting until 70 compared to claiming them at 67.
In response to these recommendations, financial planners urge to maximize contributions towards retirement accounts. For example, in 2025, retirees will be able to make a maximum $7,000 yearly contribution into their tax-deferred retirement accounts. If you’re 50 or older, you can make an additional catch-up contribution of $1,000. Workplace retirement plans such as 401(k) or 403(b) plans provide a powerful opportunity for additional savings. The catch is that you can add an extra $7,500 in addition to the standard limit of $23,500!
Yet those catch-up contributions, which allow savers to increase their retirement savings, play a crucial role in strengthening our country’s retirement savings. Nobody dreams for that goal,” he adds, which points to the need for intentional planning in order to reach retirement dreams.
He calls out the other side of the coin, the need for real dedication to these plans. “You’ve got to be willing to put the money into the plan as well,” he stresses, underscoring the need for individuals to be dedicated to their savings efforts.
As more Americans head toward retirement, the need for smart financial planning is more apparent than ever. Learn practical steps you can take to protect your future. You can lower your spending, increase your savings, or wait on taking Social Security to create a solid foundation.