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Nearly Half of Americans Will Retire Broke…Don't Be One of Them

Nearly Half of Americans Will Retire Broke…Don't Be One of Them

By Thursday, 24 May 2018 01:17 PM Current | Bio | Archive

Nearly Half of Americans Will Retire Broke… Don’t Be One of Them

According to recent surveys, nearly half of all Americans will retire broke, or nearly so. And even more  Americans will only have enough money to live on for a few years in retirement. Those are sobering figures. Perhaps people think they’ll be able to rely on Social Security, a pension, or the generosity of family, but pure hope isn’t a reliable retirement strategy. Don’t be like those who haven’t taken the steps to secure their retirement. If you haven’t started saving now, do it before it’s too late.

Most Americans Aren’t Prepared for Retirement

Nearly 14% of Americans have exactly zero saved up for retirement, nearly 29% have less than $10,000 saved, and nearly 7% have less than $50,000 saved. Since the average household spends about $46,000 per year in retirement, that means that nearly half of all American households have less than one year’s retirement spending saved up.

Since the average 65-year-old American will live another 20 years, give or take, that’s not a solid financial foundation for retirement. In order to have enough money to live on until you die, you need to figure out how much money you’ll spend every year in retirement and then adjust for inflation to figure out how much you’ll need to have saved up by the time you retire.

If you’re one of those Americans who feels like they can’t retire, there are probably a number of reasons why. Maybe you don’t think you’re earning enough money. Maybe you’re struggling trying to pay your bills. Or maybe your job doesn’t offer a savings plan. No matter what your reason, there’s a solution to it.

Pay Down Debt

One of the issues facing more and more households today is that of unmanageable debt. Whether it’s student loans, car loans, credit card debt, or the big one, a home mortgage, American households are becoming more indebted than ever. Remaining in debt can siphon away a significant portion of your income, leaving you with very little money left over to save. That’s why it’s important to minimize your debt load in order to save as much as you can.

If you’re stuck with student loans, as many people today are, it’s worth taking a look at refinancing, particularly if you can get it done before interest rates rise any further. By locking in a lower interest rate through refinancing, you can lower your payments and get your debt paid off faster.

If you have credit card debt, take a look at your spending and assess just how many of your purchases are really necessary. If you’re spending your money on frivolous, ephemeral things, you’ll need to become more disciplined in your spending. Look at every dollar spent today as $50 that you won’t have in retirement. It really puts your purchases into perspective, doesn’t it?

Trim Expenses

Many households complain about all the bills they have to pay. Between utilities, internet, and other monthly expenses, they can really add up. But here too you can go through your spending and see what’s really necessary.

You can start by looking at your gas, electric, and utility bills. Small changes to your usage, such as turning off lights when you leave a room, suspending a computer rather than leaving it running, or not leaving your faucet running while you brush your teeth can all add up into dollars saved on your bills.

When it comes to internet, phone, and TV, assess whether you really need a large data plan, or whether you really need to be watching so much cable TV or Netflix. Whatever money you can save from your monthly expenses should be invested. As it begins to grow and compound over the years, you’ll be surprised at just how much money can be saved from relatively small lifestyle changes.

Start Saving

Of course the most important part of saving and investing is to start doing it. If your employer doesn’t offer a 401(k) plan, it’s up to you to find an investment plan that works for you. You can open up an IRA, or a brokerage account to buy stocks, bonds, or mutual funds. It isn’t as easy an employer-sponsored 401(k) plan, but since you have more skin in the game and will have done more research before investing, you stand a good chance of performing better than many who just use the default options provided by their employers.

Saving can also start small, by making sure that a portion of each paycheck is deposited to a different account than your primary checking account. That “forced” savings means that you live off less than 100% of your take home pay. If you can do that by starting out with forgoing, say, 5% of your income, you can gradually increase that to 10%, 15%, or even 20% as you become more disciplined in your spending and saving.

Making sure that you invest those savings in productive assets is the next key to securing a comfortable retirement. While stocks have been the traditional investment of choice for millions of people, stock market performance has been lackluster this century, only averaging 4-5% annual growth. And with the prospect of another stock market crash in the near future, starting to invest in stocks now would be getting in at the top of the bubble.

That’s why many investors are starting to take a second look at gold. Gold has grown at double the rate of stock markets this century, offering investors both asset growth and wealth protection. It can be invested in easily with a gold IRA, offering the same tax advantages as traditional IRAs. And for those who already have retirement assets and want to invest in something with better performance, they can roll over existing 401(k) or IRA assets into a gold IRA.

Don’t hesitate in starting to save and invest your money. The earlier you start saving and investing, the better off you will be when it comes time to retire.

Trevor Gerszt is America's Gold IRA Expert, CEO of Goldco Precious Metals, and holds a position on the Los Angeles board of the Better Business Bureau.

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Nearly Half of Americans Will Retire Broke...Don't Be One of Them
broke, debt, expenses, saving, invest, ira, money
Thursday, 24 May 2018 01:17 PM
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