Retirement Funds: Neglected Saving? Start Now

Retirement funds: Have you neglected saving for retirement? Don’t hesitate any longer. Here’s how to start.
Retirement Funds: Neglected Saving? Start Now
12/8/2010
Updated:
12/8/2010
Are your retirement funds empty or severely underfunded?

Most Americans have a dangerously optimistic view of their retirement savings. A recent Wells Fargo Retirement Fitness Survey showed that 56 percent of Americans in their 50s think that they will be able to save enough for retirement, even though an October Employee Benefit Research Institute has confirmed that the average American adult faces a savings shortfall of nearly $50,000.

Have you neglected saving for retirement? Don’t hesitate any longer: Here’s how to start and make sure you have enough savings for your later years.

-Ask if your job offers you a company-based retirement fund or plan. If they do—great! But you’re not done yet. Carefully examine each plan’s stipulations, terms, and conditions. Some may even have pensions or medical benefits that you would otherwise have been unaware of.

-Set aside money each month. Don’t just think that the Social Security payments you are doling to the government are what you are getting back. Open a retirement account – the most popular are the Roth 401(k) and the traditional 401(k). The major difference between the two is that deposits into a traditional 401(k) won’t be taxed initially, but after withdrawal, and the Roth will be taxed upon deposit.

-Make an effort to stay healthy! Post-retirement health issues could double your out-of-pocket spending. Curb your weight, cholesterol, and blood pressure: these factors contribute most to conditions or diseases for older adults.

-Set a goal for how much you want to save, and be realistic. To put numbers in perspective, the Wells Fargo Retirement survey cites $300,000 as the medium amount that most people would like to save. Talk with your spouse or partner about post-retirement housing and health arrangements, and set up a plan for repeatedly putting away money.
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