Well, you would be in company, as according to data referenced in a recent retirement article on Moneywatch, 66% of workers have less than that amount saved for retirement. So actually, you might be ahead of the curve with that kind of money! And actually, with 28% having less than $1,000, the $50,000 figure is nowhere near the bottom percentiles in terms of savings.
Another thing it’s nowhere near is the point of being sufficient to meet retirement needs. Just how is someone going to survive on $50,000 retirement funds? Well, apparently many people do (or will have to), since two thirds of workers have less than that. Of course, it also depends on how old the people are. A 30 year old with $50,000 is in a much more hopeful situation than a 55 year old with $50,000.
I hope nobody feels too badly about reading these figures, but I think it’s important to say it as it is: that’s just not enough money. These figures seem consistent with a prior post on people being unable to cover a $2,000 expense, which revealed how little money people appear to have on hand.
In these situations, maybe the job of retirement falls to social security. That’s not exactly much money either in terms of cash flow, so perhaps grown children will have to be helping people. It’s not uncommon in other countries to have kids help parents, and maybe that will become more of a trend here out of necessity.
Anyway, this brings to mind the need to focus on the basics so we don’t end up in this position, and actually make ourselves more likely to be comfortable. Here are 6 steps to take to help earn a prosperous retirement:
Protect your career and cash flow
We will always have expenses, so there is some level of money that we need to have on hand to meet regular life expenses. If we lose income, we’ll quickly have to raid our savings. That’s no way to build a retirement nest egg. The so-called don’t lose money rule provides some good insight on this! Thus, we need to make sure that we invest in and protect our career.
Generate multiple streams of income
So, if the career or main source of income dries up, we could be completely messed up financially. However, by not putting all our eggs in one basket and diversifying a bit, we can open up other avenues to earn income. Multiple streams of income can not only be a good way to hedge our bets, but hopefully prosper as well!
Pay yourself first
Sure, there are some basic financial needs that come first. However, many other expenses are probably discretionary when it really comes down to it. I’d suggest paying ourselves first, and making sure that we’re regularly saving money.
Invest in yourself
One constant in life is change, and that means that we have to keep pace and adapt. No matter what many might say about education being overrated, I’d say that education and net worth go hand-in-hand – as long as there aren’t excessive student loans involved. Beyond that, always trying to do our best and put ourselves in the best position to succeed can help improve our income and earning potential.
Remember that Rate of Return Matters
It’s great to make money, and even better to make it and save it. But stopping there is almost like, using a football analogy, fumbling the ball at the one yard line. To score retirement success, we should make sure that we earn a good rate of return on our investments. Every percentage point counts!
If we aren’t healthy, it could make it harder to work. Maybe even impossible to work, depending on the circumstances. If we can’t work, we won’t make money unless there is passive income has happening. Thus, keeping healthy is vital to giving ourselves the opportunity to earn money for our regular needs as well as retirement.
Additionally, the more health problems we have, the more we have to spend money on health care. The cost of health care in retirement is something that many of us overlook, but it can be absolutely staggering. There is no shortage of people who can relay stories of elders who spent inordinate sums of money on major health issues or care.
If healthy, we can live life to its fullest. That way we can not only be able to voluntarily retire, but enjoy it as well!
My Questions for You
Do you follow each of these 6 steps?
Can you share your most important tip for retirement savings success?
What do you think of those figures indicating that a majority of workers have less than $50,000 saved for retirement?