Good morning everyone and TGIF! After taking a couple days off earlier this week, it has been a bit of playing catch up so rather than doing a full breakdown, I wanted to do one of my patented Coffee Breaks.
So what is today’s topic? Well, I just came back from the retirement party for one of my coworkers so I thought retirement was a pretty good topic to bring up! So retirement, the inevitable dream that we all have of one day being able to achieve because it means that rather than waking up to head into the office for the ol’ 9 to 5, we can focus on our hobbies. Unfortunately, the news is always talking about how people are working later because they often do not have enough saved up to be able to afford not working anymore. At the same time, we are seeing the ultra wealthy and powerful working long after retirement age despite having more than enough funds to be able to retire. How many politicians are there working long past their retirement age because they simply cannot just let go. Or what about those who simply make such large amounts of monies but they choose to continue to work and accumulate more and more funds. If I had the sort of money that Musk or Bezos had, I would disappear. I would no longer work, I’d stay out of the media cycles, and focus on things that bring me joy. They say work makes them happy, but I think we can all agree they are only doing it because they like to feel powerful. No one accumulates that much wealth when they feel happy with themselves.
So focusing on real Americans, what are the current retirement statistics? For starters, the current retirement age is 66 for those born between 1943 and 1954; for those born after 1960 it is 67. While you can certainly choose to retire earlier than that but these ages have to do with when you can begin claiming the most in Social Security. When you retire early, you take a reduced amount so this really when come down to your personal finances. I cannot stress enough, it is important to have a financial advisor who can assist with these sorts of questions.
Many of us have retirement accounts, most often in the for of a 401(k) but there are many other options. So let us say you have a 401(k), how much should we have in this account when we retire? This is a pretty broad question and certainly comes down to how early you retire, do you have a significant other who also has an account, what are you personal expenditures, etc… Well according to Bankrate, when you choose to retire they actually recommend having at least 10-years worth of your current salary saved up in your 401(k) which can seem very daunting to say the least.1 Additionally, they provide the average and median breakdowns of 401(k) accounts based on ages, as seen below:
Where do you do you place for your age group? Without going into my actual information I can say that I am 34 but I did not actually start a 401(k) account until the age of 25 when I joined my current company and that had this as an option. Unfortunately, most people in their 20s are not concerned with thinking about saving up for retirement. But a decade later I realize that I still have to work another 30-years and then hope that I have enough saved up. Or maybe I will get lucky and come into a lot of money where I can sort of disappear and enjoy myself.
So for those out there, regardless of your age group, what are your retirement tips for us saving and trying to get there? Do you have a side hustle that funds your retirement? Or are you one of those you saves a lot early on so you can enjoy it later? Or do you simply have a saving account rather than a 401(k) to avoid those penalties should you wish to access those funds? Feel free to share below in the comments!
With my coffee about done and needing to get back to my desk, I want to thank you for swinging by for this Coffee Break. I’ll have a full Breakdown for you this next week, and as always I’ll be sure to see you around the Breakroom.
- Baker, B., & Whelehan, B. (2024, February 6). The average 401(k) balance by age. Bankrate. Retrieved April 18, 2024, from https://www.bankrate.com/retirement/average-401k-balance-by-age/#:~:text=Fidelity%20says%20by%20age%2060,k)%20balance%20should%20be%20%24800%2C000. ↩︎
