“Start saving for retirement while you’re young.” It’s easier said than done when you are just starting, especially if you have student loan payments taking a huge percentage of your paycheck.
First, let’s determine how much you should have saved for retirement. Retirement-plan provider Fidelity recommends having the equivalent of your salary saved by the time you reach 30. In other words, if your annual salary is $50,000, your goal should be to have $50,000 in retirement savings by 30.
How do your savings stack up against others your age? The average 401(k) balance for individuals between the ages of 30 and 39 is $50,800, according to data from Fidelity for the fourth quarter of 2020. However, the average employee contribution rate for Americans in this age group is only 8.3%.
One easy way to kick start your retirement savings is by taking advantage of any retirement matching programs your employer offers, which is essentially free money for you. Those matching funds from your employer can add up fast and help you get closer to your savings goals.
Not sure if your employer offers this? If you don’t ask, you could be missing out on a huge benefit to you.