Many households are considering their financial future this time of year and making planning decisions that will ultimately impact retirement. Follow recent coverage on important resources and mistakes to avoid when planning for retirement.
Many Americans households have virtually no retirement savings and many rely exclusively on Social Security. This shortfall is especially critical for people who are just a few years away from retirement. Over 45 percent of all working-age households — or more than 39 million — have no retirement assets1. Cultural and demographic shifts have contributed to this crisis:
- Retirement often used to mean counting on a company pension, but now it often means counting on your own savings. Many people in their 40s and 50s are caught in this transition.
- Additionally, a retirement “nest egg” needs to last longer than ever before.
Here are ten retirement planning tips to help you achieve retirement peace of mind from Jean Setzfand, AARP Senior Vice President of Programs:
- Start saving today. The earlier you start, the longer you have to save and invest, and the less you need to save each month. AARP and the Ad Council developed a new interactive online resource, AceYourRetirement.org that will provide you with customized action items after you respond to some simple questions.
- Save more, if you are getting a late start. Find ways to free up more money to save from AARP’s latest list of 99 great ways to save, and get a handle on credit card debt. Make a payment plan and stick to it, then dedicate those monthly payments to saving once you’re paid up.
- Use your 401(k) or similar retirement savings plan at work, and save as much as you can through it. You may get an employer match to boot – try to save at least as much as your employer match. Consider a target date fund for your investments, since they offer a mix of assets that adjust based on your expected retirement date. And, if you don’t have access to workplace 401(k) or retirement plan, open an IRA through a bank or other financial institution. Sock away as much as you can, up to IRS limits and consider target date funds.
- Increase your contribution to your 401(k) or IRA, every time you get a raise. And while it may be tempting to spend your tax refund or annual bonus, try treating yourself to something small and use the rest toward your retirement goal.
- Take advantage of “catch-up contributions” of an extra $1,000 in IRAs and an extra $6,000 in 401(k)s if you are age 50 or older.
- Know your goal. There are many free tools online, including AARP’s retirement calculator, which can help you define a specific retirement savings goal.
- Work as long as possible — even part-time gigs in retirement. While many people will not be able to work longer, it’s an important consideration for those who don’t have enough savings or a pension to rely on. Working longer gives you more time to save and invest, and less time to fund in retirement.
- Understand that the average annual Social Security benefit is a little less than $17,000 — so saving and investing is very important. If you are able to, consider delaying your benefit, which grows 8% a year between your full retirement age and age 70.
- Consider affordability and livability when thinking about where to retire. You might even consider settling down internationally, in a country where couples can live comfortably on as little as $1,500 a month. To find your community’s livability score (“livability index”) and resources to proactively make your community more livable visit, aarp.org/livable.
- Consider seeking help from a financial professional. For people who want help from a financial advisor, AARP has just launched a free online tips tool called Interview an Advisor that walks the user through questions to ask an advisor before hiring one. We developed it with the North American Securities Administrators Association. The tool functions like an app and is accessible on smartphones, tablets and computers.
Visit aarp.org/money for more on saving, investing and taxes.
Keep current with AARP Media Relations:
- Source: NIRS analysis of 2015 Survey of Consumer Finance
In addition to advocating for older Americans in the halls of Congress, AARP staff and volunteers are working on the ground in all 50 states, Washington, DC, Puerto Rico and the U.S. Virgin Islands to make a difference in people’s lives through advocacy. This year, we have helped enact state policies to support more than 30 million family caregivers and provide thousands of workers with a new way to save for retirement.
Achieving these results took a lot of hard work and dedication from state legislators, governors and other elected officials. They worked together – often across party lines – to write, support, and advance commonsense policies that make people’s day-to-day lives a little bit easier and gives them more financial security in their retirement.
To recognize these elected leaders, AARP is proud to announce our fourth annual bipartisan class of Capitol Caregivers who fought to increase support for family caregivers and their loved ones along with our third annual bipartisan class of Super Savers who fought to help more Americans retire with confidence.
Every day, 40 million Americans help parents, spouses and other loved ones live independently at home, where they want to be. Family caregiving is a labor of love, to be sure, but it can also be a challenge. Care responsibilities can include providing transportation, cooking meals, managing finances, performing complex medical tasks, helping with bathing and dressing, and so much more. Sixty percent of family caregivers juggle full- or part-time jobs with their caregiving duties, and many are still raising their families.
AARP is fighting for commonsense solutions to make these big responsibilities a little bit easier—and we’ve seen real progress in states across the country.
AARP’s 2017 class of Capitol Caregivers recognizes 91 state legislators, five governors, one lieutenant governor, and one justice from more than 30 states, who advanced policies that:
A list of AARP’s 2017 Capitol Caregivers and the legislation they championed can be found here.
Today, 45 percent of working-age households have no retirement savings at all. At AARP, we believe everyone should be able to retire with confidence. That’s why we’re fighting for Work and Save plans that give more workers access to a payroll deduction retirement savings plan. Employees who are able to save for retirement out of their regular paychecks are 15 times more likely to save.
AARP’s third class of Super Savers includes six state legislators and two state treasurers who were integral to the passage of state-facilitated retirement programs in 2017.
A list of AARP’s 2017 Super Savers and the legislation they championed can be found here.
More work to do . . .
In 2018, AARP will continue to work with elected state leaders across the country to fight for the issues that matter to you and your families. To stay up-to-date on our progress, or get involved, sign up here.
2014 Capitol Caregivers
2015 Capitol Caregivers
2016 Capitol Caregivers
2015 Super Savers
2016 Super Savers
Nancy LeaMond is AARP chief advocacy and engagement officer. She leads the organization’s Communities, State and National Group, including government relations, advocacy and public education for AARP’s social change agenda. LeaMond also has responsibility for AARP’s state operation, which includes offices in all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
You can follow her on Twitter @NancyLeaMond.
This week, we unveiled our new Saving for Retirement ad campaign to empower Americans to take control of their financial futures. In fact, two in five households headed by Americans ages 55-64 have no assets saved for retirement, according to the National Institute on Retirement Security.
We understand that retirement planning can sometimes leave people overwhelmed, confused or even paralyzed. But what most people don’t realize is that they already have the financial know-how to tackle this challenge.
That is why we teamed up with the Ad Council to launch a PSA campaign that will remind consumers they have what it takes to save for retirement. The PSAs celebrate financial milestones and successes Americans have already mastered—from home ownership and vacation planning, to financing a child’s education—and urge them to apply that same financial know-how to get on track with their retirement savings.
To inspire people to take action, the PSAs direct people to AceYourRetirement.org which helps break down the retirement savings process into easy, actionable steps. After answering a few questions about their savings and goals, each person will receive a personalized Action Plan that highlights three practical next steps they can take to get on track for their retirement. The process takes roughly three minutes. The recommendations cover a wide range of topics, such as how to get the most out of a workplace retirement plan, how to turn a hobby into a source of income during retirement or how to have a conversation with family members about getting on the same financial page.
In addition to the ads and online resources, AARP Vice President of Financial Security Jean Setzfand participated in several TV interviews to discuss the retirement crisis confronting Generation X and how the campaign can help people get on the right track for retirement.
To get the simple steps to get started on saving for your retirement, visit AceYourRetirement.org.