Sometimes small moves can yield big results. If you want to plan for a better, more secure retirement, start by increasing your 401(k) contribution by just 1%. You might be thinking that 1% can’t possibly make that much of a difference — but you’d be wrong. Here’s what Fidelity Investments found when they ran the numbers on the effect of a 1% retirement account increase for employees at different ages and salary levels.
Example #1: Suzi, age 35, earning $60,000 per year. If she put less than $12 more into her retirement account each week, Suzi could accrue over $85,000 more by retirement.*
What could that money buy her? According to cars.com the average new car payment is now $523 per month. With her additional savings, Suzi could ride in style for 162 months during retirement — that’s more than 13 years of new car smell!
Example #2: Andrew, age 45, earning $70,000 per year. By adding just under $14 more per week to his 401(k), Andrew could have almost $43,000 in additional funds in his account by the time his retirement rolls around.
What could that money buy him? According to time.com the average cost of a typical Walt Disney World vacation for a family of four is about $6360. With his additional savings, Andrew could take his wife and both grandkids on a magical vacation six years in a row with plenty left over to buy souvenirs. And the memories they’ll share? Priceless.
Example #3: Sharon, age 55, earning $80,000 per year. If Sharon started contributing less than $16 per week more to her retirement account, she could bank over $16,000 in additional savings by the time she retires.
What could that money buy her? According to care.com, the average monthly cost for biweekly housekeeping services for a medium-sized suburban house or apartment is about $150. So with her extra savings, Sharon could put her feet up and relax while someone else cleans her home for more than eight of her golden years — that’s a clean start for retirement!
Not sure how to squeeze out the extra savings? Here are three ways to contribute more to your 401(k) and feel it less:
If you’re not on track with your retirement goals, don’t panic. Start small — increase your 401(k) contribution by just 1% and you’ll be on the right path to making your golden years bright ones indeed.
Sources:
https://www.fidelity.com/viewpoints/retirement/save-more
https://www.care.com/c/stories/2829/how-much-does-a-housekeeper-cost/
Perhaps you’ve lost a job, faced an illness or have been delt a family crisis that emptied out your emergency fund. What are your next steps?
You’re eyeing center-hall colonials in your neighborhood and dreaming about the garden you want to plant in the backyard and all the holiday celebrations you’ll host. You’ve saved toward this goal and think you’re ready to pull the trigger. But the real question is: How much house can I afford?
Or is it?
Social Security’s financial cliff is coming closer into view. Experts project that the fund that pays for government retirement benefits through FICA taxes will be depleted within the next 15 years.
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