You’re going to need savings in retirement to maintain your lifestyle. The average couple receives around $35,000 annually from Social Security, so most people require income from elsewhere to cover their basic needs, healthcare, and fun. You can generally withdraw 3% to 4% of a retirement account each year without running the risk of depleting it too early, so you might require a fairly large number to supplement Social Security. However, many people have little or no retirement savings, even into their 40s and 50s.
Consider these three strategies to set effective goals and maximize your retirement savings plan.
This might sound simplistic, but the best way to increase the amount of assets you’ll accumulate in retirement is to save the right portion of your income along the way. Saving 15% to 20% of income throughout your working life should be enough to comfortably maintain your lifestyle in your retirement years. That’s hard to do even when things are going well — the savings rate for Americans has been between 5% to 10% in recent decades. When life gets in the way with unexpected expenses or losses of income, it’s even tougher to keep building retirement assets.