How much does the average 70-year-old have in savings?According todatafrom theFederal Reserve,the average amount of retirement savingsfor 65- to 74-year-oldsis just north of $426,000.
While it’s an interesting data point,yourspecificretirement savingsmay be different from someone else’s.Thebetter questiontoaskmightbe,how muchsavings do you needtobe comfortable in retirement?
THE DIFFERENT TYPES OFRETIREMENT SAVINGS
The idealretirement planinvolves generating multiple streams of incometo providebothstability and tax flexibility in retirement. Here are a fewpotential components of awell-diversified retirement plan:
Cash savings.Having liquid cash reserves in a high-yield savings accountis a good safety net for retirees.See AlsoReasons For Moving to Wyoming in 2022 - Pros & ConsThe Best Cities To Retire on $2,000 a MonthWhat Is the Average Social Security Benefit at 65?Here's how much Americans have saved for retirement at every age(Video) The Average Savings Rate in America is Only _______! (NOT a Good Number)
Retirementaccounts.401(k)sandtraditionalIRAs, whichare funded by pre-tax contributions, can significantlyboost your retirement savings.On the flip side,Roth IRAsand Roth 401(k)s, which arefunded with after-tax dollars,can help you manage your taxable income in retirement.
In addition to savingsand investments,you can also tap intovarious sources ofguaranteed income in retirement.Guaranteed incomestreams areinsulated frommarketvolatility, making them saferand more reliable.
Income annuities.Similar toSocial Security andpensions,annuitiesprovidefixedmonthly income.Becauseyouoftenreceivethosepayments for life,theyreducethe riskofoutliving yoursavingsin retirement.See AlsoThe Most Popular States to Retire to in the U.S.Teton County has highest concentration of wealth per household than any other county in the nationThose Who Married Once More Likely Than Others to Have Retirement SavingsRetiring in Jackson Hole - Jackson Hole Real Estate - Mercedes Huff(Video) Average 401K Savings BY AGE // How does your 401k compare?
Whole life insurance.In addition toprotectingyour loved ones,apermanent life insurancepolicy accumulates cash valueover time. Because it’s guaranteed to grow,this accumulated valuecanalso serve as acash reserve orasource of income,particularlyduringmarket corrections or recessions.
YOUR RETIREMENT LIFESTYLE DETERMINESYOUR SAVINGS
No matter how much money yousave for retirement, it’ll only go as far as your lifestyle allows.Thinkabout what you want fromretirementand whetheryourcurrentsavings ratecan realisticallysupport that vision, based on conservative assumptions about risk and future returns.If not, you may need to tweak your savings strategy or compromise to adjust your expectations.
As you determine your retirement savings target, the4-percent rulecan be agoodstartingpoint— thoughit’snot acomprehensive plan. This issimplya general rule that recommends withdrawing 4 percent from your savings during your first year of retirement. You then continue to withdraw the same amount each year, plus a little extra to account for inflation.
Your retirement savings plan should be tailored to your unique goals and financial situation.A financial advisorcan help you create a plan that works for you.
Income annuities have no cash value. Once issued, this annuity cannot be terminated (surrendered), and the premium paid for the annuity is not refundable and cannot be withdrawn. The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.