Monthly educational slide presentation to help you maximize your plan
In prior months, this letter has provided guidance on how much and why you should be saving for retirement. As a refresher, previous letters are available here. This month, we’re talking about the different retirement saving options available to employees and the contribution limits for each option.
According to the Social Security Administration, nearly 90% of people 65 and older receive monthly Social Security benefits with the average monthly benefit equal to $1,335.
Why is it so important to save for retirement (Part 1)? Life Expectancy is a big reason. In addition to Social Security benefits (more to come on this next month), your investment portfolio is likely to be your most significant source of financial support in retirement. Naturally, the longer you live, the more financial support you will need and people do continue to live longer. The following chart uses information from the Social Security Administration to compare the probability of living to a specific age for someone born in 1950 versus 1990.
Beginning with the first paycheck you received, you’ve likely been hearing a consistent message from family, friends and employers encouraging you to save for retirement. While this is certainly invaluable guidance, it’s not clear to most how much should be saved to reach a goal of financial independence. Are you on track for a successful retirement?
In addition to saving for retirement, it’s important to periodically check if the amount you’re saving is on track to cover your future retirement needs. Ascensus offers a Retirement Plan Calculator on their website which calculates an estimate of how much you’ll need for retirement based on your age, plan balance and the amount you are regularly contributing to your plan. Are you on track to reach your goals?