Although Americans are optimistic, more and more Americans are now worried about retirement. A survey by the Employee Benefit Research Institute of the United States showed that 49% of wage earners doubted whether they could live a comfortable life after retirement, and 28% felt that their life after retirement was “not sunny.” The survey also showed that Americans have eight major worries about retirement. So what are these worries?
1. Not enough retirement savings. In the survey, 66% of the respondents said they had retirement savings, which is a good thing, after all, they know they need to save money for their retirement. But unfortunately, although they have saved money, it is too little to continue to live a good life after retirement.
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57% of the respondents have less than $25,000 saved for retirement , which is likely to be spent in a year. 28% of the respondents are even worse off, with less than $ 1,000 saved for retirement , which is just a decoration.
Financial experts at Capital Financial Group believe that if one’s monthly income is only used for daily life throughout one’s life and one fails to save a certain amount of money for retirement, one will inevitably face difficulties in life when one retires.
Generally speaking, in order to maintain a standard of living after retirement, the accumulated retirement money should be ten times the annual income when working. For example, if a person’s annual income is $ 50,000 , the accumulated retirement money should be $ 500,000 . With such an amount of personal retirement money plus the social security money received after retirement, life after retirement can be guaranteed. Financial experts suggest that in order to enough money after retirement, people should invest 10%-15% of their income every month in their retirement accounts during their working years. If you start saving money for retirement later, the amount invested in your retirement account every month should be even greater.
2. Spending the funds in the retirement account too early. Americans like to change jobs, which is nothing more than selling themselves at a good price in the fierce market competition. The company’s 401K retirement savings plan generally follows the person, but when some Americans change jobs, their retirement pension money becomes a small treasury for consumption.
According to the survey, 26% of the respondents used their previous 401K retirement account investments for consumption or to repay debts after changing to a new employer . This is equivalent to spending the funds in the retirement account prematurely, which has serious consequences.
U.S. retirement savings accounts are mainly divided into two types: tax-deferred and non-tax-deferred. An individual’s Roth retirement savings account is a non-tax-deferred retirement savings account. The money invested in the year needs to be taxed, but the advantage is that there is no penalty or tax to pay when withdrawing the money early.
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