Saving for retirement is an important thing. If you don’t do it, you may be limited to Social Security alone once your time in the labor force comes to an end. And that could be a dangerous thing.
Social Security will only replace about 40% of your pre-retirement income, and that assumes you earn an average wage during your career. Most seniors, however, need roughly twice that much income to manage their bills without undue stress or budget cuts. And so you’ll clearly need savings of your own if you want to meet that mark.
Meanwhile, recent data from Vanguard reveals that 401(k) savers have an average of $141,542 socked away for their senior years. By contrast, only 15% of savers have a balance of $250,000 or more.
If you haven’t reached the $250,000 mark in your 401(k) plan, there may not be any reason to panic. But if you’re older, it may be that you need a serious catch-up plan.
The average American has $141,542 in a 401(k) account: How does your balance compare?
It’s all about your personal timeline
If you’re in your 20s or 30s and you don’t have $250,000 saved for retirement, don’t sweat it. The reality is that many people start off with lower wages earlier on in their careers, and at that point, you’ve only had a decade or two to benefit from compounded returns in your 401(k).
But if you’re in your 50s and you don’t have $250,000 socked away for retirement, that could be more problematic. And if you’re within a few years of retirement, well, frankly, it may be very…
