Laying Down A Secure Path: How Much to Save for Retirement by Age

Planning for retirement is a lifelong journey. It starts with the first paycheck you earn and ends when you finally hang up your work boots for good. The question that is often at the top of most people's minds is, "How much should I save for my retirement?"

At Encompass Credit Union, we believe in helping our members create the financial future they desire. Here we will provide a guide on planning your retirement savings based on your current age.

Start Early, Save Consistently

The axiom 'the sooner you start, the better' is perhaps nowhere more apt than in retirement planning. Due to the magic of compounding, your savings will grow more the earlier you start. Remember, it's not about the dollar amount as much as it is about consistency.

Retirement Savings Options

When planning for retirement, it's crucial to understand your savings options. These typically include 401k, IRA, and Roth IRA accounts, among others.

401(k) plans are employer-sponsored retirement accounts that often come with employer-matching contributions. Traditional and Roth IRAs are types of accounts that you set up independently, each with unique tax advantages.

Advantages of Different Account Types

Each type of retirement savings account has its unique advantages. For instance, traditional 401(k)s and IRAs allow tax-deductible contributions, deferring the tax burden until retirement. Roth 401(k)s and Roth IRAs, on the other hand, are funded with after-tax dollars but allow for tax-free withdrawal in retirement.

The right combination of different retirement accounts can create a diversified retirement portfolio, providing a well-balanced approach for different financial and life scenarios.

Age and Saving for Retirement

Determining how much to save for retirement isn't a one-size-fits-all answer. It should factor in your current age, planned retirement age, lifestyle desires, and other financial goals.

For instance, a common guideline is to have about 1x your annual salary saved by the time you reach 30, 3x by 40, 6x by 50, and so on. This scale adjusts based on your income, expected lifestyle, and when you plan to retire.

Let's Start Planning Together

There's no absolute right or wrong number to save for retirement. The most important part is getting started and staying consistent. At Encompass Credit Union, we’re here to help you chart the best course forward based on your unique circumstances and financial goals.

Are you ready to start planning for your retirement or perhaps reassess your current retirement plan? Visit our contact page or drop by one of our branches to start a conversation about your retirement savings. Let's design your retirement future together.

Please note that this discussion is for informational purposes only. It's always best to discuss your individual circumstances and needs with a financial advisor or planner.

You can reach Encompass Credit Union at Contact Us page.

This section should be taking up the bulk of the blog. There are plenty of references online with the average retirement savings by age.