By Jared Ross, President & CEO, Florida Credit Union Association
Most American consumers stress about saving for retirement – but many haven’t discovered the ways a credit union can help.
That’s right: You aren’t the only one sweating the money (or lack thereof) you have squirreled away for retirement. A survey of 1,000 people aged 25 and older conducted by financial firm Allianz Life found that the bulk of Americans stress about saving for the end of their careers.
According to the survey, 55% of non-retirees worry they won’t have enough saved to retire when they choose. Another 60% are concerned that they’ll run out of money before they die.
These fears aren’t unfounded – saving for retirement can indeed be daunting. Conventional wisdom once dictated that workers should save $1 million by the time they retire, but experts now suggest that won’t be enough, according to a U.S. News and World Report article.
Experts traditionally suggested that retired people should withdraw 4% of their savings each year. That would mean a retiree with a $1 million nest egg would live on about $40,000 annually. However, the U.S. Bureau of Labor Statistics found that U.S. consumers aged 65 to 74 spend an average of $48,885 a year.
That means workers should plan to have closer to $1.2 million in savings before they can comfortably retire at today’s rates.
Many American consumers aren’t ready for that reality. According to the U.S. Federal Reserve, nearly a quarter of American adults have no retirement or savings or pension at all. From that data, we know that 26% of Americans aged 30 to 44 have no retirement savings, and 42% of those aged 18 to 29 have yet to save for the end of their career.
These numbers are alarming – but not impossible to correct. The Allianz Life survey found that only 27% of those who stressed about retirement had actually spoken to a financial advisor. And that could make all the difference.
Credit unions usually employ these financial experts to help guide their members toward a savings plan that takes into account what they already have saved, as well as the lifestyle they plan to maintain during retirement. If you’re feeling overwhelmed by the prospect of saving for retirement, contact a credit union.
You may be surprised how much you can save toward a solid retirement plan, through the help of financial experts available at a credit union near you.
Here are some basic tips most credit union experts agree will help toward retirement:
- Start saving now – even if you can only afford to put away a small amount. As you move further into your career and increase your income, you can increase the amount you’re saving toward retirement.
- Research what your employer offers for retirement. The most popular option is the 401(k), which is employer-sponsored. Take advantage of this plan and put as much as you can of your own money into your employer’s 401(k) plan. Employers will often match a portion of what you put in.
- Consider a separate Individual Retirement Account for more investment. It could be a traditional IRA, or a popular Roth IRA. You also have options related to Health Savings Accounts.