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5 Proven Ways to Save More for Retirement in 2019
Are you resolving to save more for retirement in 2019?
These proven tips can help you save extra money for retirement in the new year.
1. Put liquid assets in a high-interest account
Estimated Savings: ~$33,000
The national average interest rate for a saving account is just 0.06%, according to the Federal Deposit Insurance Corporation (FDIC). However, right now, you can easily find savings rates as high as 2.45%.
This CIT Bank Savings Builder Account offers 2.45% interest as long as you deposit at least $100/month or maintain a balance of $25,000.
2. Max out your retirement account contributions
Estimated Savings: $150,000+
One of the biggest retirement mistakes that ends up costing people the most money is just not saving enough.
The Washington Post reported last year that the average company 401(k) match was up to 4.7% of employees’ salaries, while the median household income in 2016 was $59,039, according to the U.S. Census Bureau. By that math, if you’re not contributing to a 401(k), not only are you missing out on up to $18,500 per year in pre-tax, interest-earning retirement savings (the annual contribution limit), but potentially $2,774.83 in free, employer-paid retirement savings.
3. Downsize your home
Estimated Savings: ~$265,000
Our recent study found the national average housing costs per year in retirement are $8,819, based on data from the Bureau of Labor Statistics (BLS) and Council for Community and Economic Research. Multiply that by 30 years and you’ll spend an average $264,570.
Between a mortgage, property taxes, insurance, potential homeowners association fees, utilities and maintenance, a large home is expensive to keep up. A recent GoBankingRates study revealed that owning a home costs an average $1,204 per month in maintenance alone.
4. Properly estimate your healthcare expenses
Estimated Savings: $220,000
Top economist Paul Fronstin estimates that Medicare will only cover 51% of healthcare expenses for retirees. While the average retiree has 25% lower expenses than non-retirees, healthcare expenses jump by more than 40%.
Of older adults, 80% have at least one chronic disease and 77% have two or more, according to the National Council on Aging. Studies show the average 65-year-old couple will need $220,000 to cover health care expenses in retirement.
5. The Best Way to Save More Money for Retirement
While the value of consulting a financial advisor will vary by person, research suggests that average additional investment returns can range from 1.5% to 4% each year.
Chances are, there are several highly qualified financial advisors in your town. However, it can seem daunting to choose one.
This new tool makes it easy to find the right financial advisor for you. Now you can get matched with up to three local fiduciary investment advisors that have passed a rigorous screening process.
1. Simply enter your ZIP code below.
2. After you enter your ZIP code and answer questions about your financial goals, you can compare up to three top advisors local to you and decide which to work with.
3. Enjoy a better financial future!
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SmartAsset - copyright 2018
SmartAsset - copyright 2018
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