Half of Americans Don't Expect to Be Financially Prepared for Retirement. Here's How to Avoid That.
Some sobering figures on retirement preparedness were published in June. In a survey conducted by Northwestern Mutual, around half of respondents said they don't expect to have enough saved by the time they reach retirement age. Even worse, baby boomer and Gen X respondents were among the least confident compared to other age groups, and they don't have multiple decades to change course. Regardless of whether you're just a few years from retirement age or have a whole career ahead of you, consider these key strategies to relieve stress and keep your retirement plan on track.
There are a lot of variables that determine your required retirement savings. These include retirement age, cash-flow needs, income sources, tax liabilities, and inflation. Many of those variables are out of your control or impossible to predict a few decades in advance, so it's hard to put together a long-term action plan. As a result, it's usually ineffective to strive for a precise number as a retirement savings goal.
Most people enjoy more success with goals that are manageable, short-term, and repeatable. It can be daunting to plan around saving a huge number a few decades down the road. It's a lot easier to create a monthly budget with a target savings rate. If you can achieve those monthly goals with some consistency, those achievements can compound over time to deliver the best possible outcome in the long term.
Source Fool.com
