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The Troubling Reason 1 in 3 Americans Will Not Be Able to Retire

Ellen Chang | JAN 18, 2018

One in three Americans are unable to retire, according to new data from Northwestern Mutual.  

The study found that Americans simply do not have enough saved for retirement. Specifically, 1 in 3 Americans have less than $5,000 saved for retirement, while 1 in 3 Baby Boomers have less than $25,000 in savings. Even more alarming: 1 in 5 Americans have nothing saved at all.

Planning for retirement should always be a priority, whether you’re in the early stages of your career or closing in on your golden years. The financial planning and investment decisions you make now will directly impact the lifestyle you can afford to live after you stop working.

Here are some strategies to boost your retirement savings.

1. Avoid common financial mistakes. 

Prioritize paying down any outstanding debt, such as your credit cards, any remaining student loans and your mortgage. Once you have paid off those bills, “pay yourself” the same amount each month by socking away the money in a tax-advantaged retirement account. If you are unsure how to allocate contributions between your accounts, discuss your options with a financial advisor.

2. Build an emergency fund with a high-interest savings account.

Building an emergency savings account to pay for unexpected home repairs, trips to urgent care or for when you’re in between jobs can help you avoid going into debt or borrowing from your retirement. 

Putting your savings in a high-interest account can help you build your savings over time. Over 20 years, if you sock away $25,000 in an account earning 2.45% interest, you can earn over $15,000 in interest alone.

This CIT Bank Savings Builder Account offers 2.45% interest as long as you deposit at least $100/month or maintain a $25,000 balance. 

3. Consider your living situation.

Moving to a state with lower income or property taxes can help you save more money that you can use to pay down debt or allocate to a retirement account. Seven states do not have an income tax: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

The Best Way to Save More for Retirement

Working with a financial advisor is one of the best ways to boost your retirement savings. These financial planning professionals provide expertise and guidance on how to best allocate your assets, make good investments, avoid expensive fees and maximize your retirement contributions. 

Financial advisors can also help you determine the best order to withdraw from your accounts, allowing you to take advantage of compound interest or potential tax incentives. 

Follow These Steps to Get Matched With the Right Advisor for You

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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