INVESTING FOR RETIREMENT: ARE YOU DOING ENOUGH?
15th November, 2020
Are you investing enough for retirement? Most people are not.
Some people think they are doing enough when they are not, while some others have not even taken any step in this direction. This could be because of lack of proper orientation as regards how to make the most of your present financial status.
Investing for retirement is about using what you have currently to get what you want in the future. `it involves using your present income to create the luxury future you want after retirement.
Nobody wants to retire into hardship, not even you. However, retiring into comfort requires proper planning and action.
As per US Fed data, Americans in their 60s have average retirement funds of US$182K (not including those without a retirement account). While this sounds like a decent sum, it would result in monthly annuities of a little over US$1,000.
This wouldn’t be enough for comfort as an average American retiree spends approximately $3,800 per month according to the 2018 data from the Bureau of labor statistics.
What Should You Do Differently?
It’s simple. Be more intentional about preparing for the exact kind of retirement you want. Don’t just assume you are doing enough or too much. Set your goals and work on achieving them by making smart investment decisions.
We can help you at Tiva.
Check out the charts below
📊 Chart 1 illustrates the median American household income by age group. As seen above, the average retirement funds are equivalent to 3 years of income for householders aged 65-74.
📊 Chart 2 illustrates the projected retirement funds that could be amassed with a more disciplined approach. This analysis assumes saving rates of 10%, 15%, and 20% of median household income (adjusted for inflation), invested in a diversified funds portfolio returning 10%. It also assumes savings to begin at the age of 30, and retirement at 60 (current US retirement age is 67).
Although this analysis pertains to the US, the picture is likely to be more stark in other countries, with lower levels of financial education and access to investment products.
This reinforces that, the earlier you take informed and disciplined actions as regards saving and investing for retirement, the more likely you are to hit your goals and retire into comfort.
