If you're like most Americans, you know you need to save more for retirement... but you may not be sure exactly how to go about it. It's a common issue; in fact, a study from the National Institute on Retirement Security found that the median retirement account balance for all households of working age is just $3,000. Of these, 45 percent don't have any retirement savings at all.
Regardless of where your own retirement readiness may fall on the spectrum, you can still reap the benefits by shoring up your nest egg and bulking up your retirement savings efforts.
Here are 10 ways to give your nest egg a boost.
1. Retirement Planning Advisors Suggest a Larger Savings Goals
In the past, conventional wisdom told us to try to replace about 75 percent of pre-retirement income during the golden years. Today, our expectations about the standard of life in retirement have changed. Health care costs are higher, taxes are likely to increase, and retirees aren't just sitting around. Instead, they're out volunteering, engaging in hobbies, traveling, and making the most out of life... and all that costs money. A safer bet? Aiming to replace 100 percent of pre-retirement income.
2. Retire Later
Though the average retirement age may be 62, this simply isn't realistic for many. Delaying retirement for a few years can offer significant benefits, including more years with income, more time to allow investments to grow, less time to live off of savings, and the chance to earn more Social Security.
3. Don't Expect History to Repeat Itself
As any reputable investment professional will tell you, you can't expect the past to repeat itself. Unlike previous generations, you're unlikely to receive a generous pension, to see steadily increasing housing values, or to depend on a consistently bullish stock market. Being truly diversified is more important than ever.
4. Plan to Live to 100
Though no one can accurately predict exactly how long their life will be, life expectancies are increasing. When you're creating your retirement plan, assume you'll live to be 100 years old
and take it from there.
5. Financial Planning Strategies: Save 25%
Since you're living to 100, you'll need enough savings to fund several decades of life.
That means setting aside as much as possible now in order to prepare for the future. Aim to set aside at least 25 percent of your income.
6. Never Stop Learning
Why? Consider that more than 70 percent of Americans over age 50 plan on continuing to work at least part-time in retirement. In order to remain employable, you must cultivate skills and keep up with current technology so you can find a job if you need one.
7. Investing: Part of Your Comprehensive Financial Plan
If you want your money to grow, you must invest. If you feel overwhelmed, speak to your financial planning advisor. There are a number of complexities around investment options that they can help you navigate and can help take the guesswork out of investing.
8. Keep the Future in Mind
We get it: Saving isn't as fun as spending, especially in a society that tends to reward the instant gratification of shopping. Saving requires a long-term view and delayed gratification. However, imagining yourself as an older adult can help you develop a sense of compassion for your elderly self, and help you make the right decisions now to create a better life for yourself in the future.
9. Educate Yourself
Just a bit of financial knowledge can help you make informed decisions. Take time to learn the basics of investing and retirement planning so you can better understand your options.
These simple tips can help you make the most of an existing nest egg, or kick start your retirement planning.