Use our new AI tool to find the right Self-Directed IRA!

IRA Financial Blog

Hitting Your Financial Goals at Retirement – Episode 212

financial goals at retirement

IRA Financial’s Adam Bergman discusses how you can reach your financial goals at retirement and also demonstrates why it is important to start early, be consistent and trust the process.

In his most recent podcast, Adam Bergman talks about how to reach you financial goals at retirement. Further, he discusses the alarming statistics concerning how much Americans have saved. Most importantly, he emphasizes the three things that you must do to retire when and how you want.

Retirement Statistics

According to a Northwestern Mutual survey from May of 2018, one in three Americans have less than $5,000 saved for retirement. Further, 21% have nothing saved for retirement. One third of Baby Boomers, those who have reached or are near retirement age, have less than $25,000 put away.

The Transamerica Retirement Survey reveals the median retirement savings for all households is about $50,000. Obviously older people have more time to save, therefore the average for them is around $152,000. Generation X has about $66,000 saved, while Millennials have approximately $23,000. The younger you are, the more time you have to reach your financial goals at retirement.

Moreover, many experts say you should have seven times your salary saved by age 55. For example, if you earn $50,000 annually, you should have $350,000 saved for retirement. It seems like a lot of money, especially if you haven’t started savings. However, by starting young, being consistent and trusting the process, it is a very attainable goal for everyone.

How To Reach Your Financial Goals at Retirement

We just said it, but it bears repeating. Attaining your financial goals at retirement starts with three things – Start young, be consistent and trust the process!

Start Young

It should go without saying, but the younger you start saving, the better off you will be. Thanks to the power of tax deferral (or tax-free gains in the case of a Roth) and compounding returns, your retirement funds grow faster the long they are in there. The key is to start saving as soon as financially possible. Every little bit helps! For example, if you saved $1,000 every year from age 20 to age 70 with a seven percent (7%) annual return, you will have almost $435,000. If you wait until age 30 to start, you would only have $213,000 by age 70! Put your money to work as soon as you can!

Be Consistent

Consistency with your retirement saving is almost as important. While there may be years that you can’t afford to contribute as much to your 401(k) or IRA, it helps when you can contribute as possible. Lulls in your retirement saving will have adverse affects on your goals. Experts say you should contribute a minimum of 10% of your annual salary. Further, you should up your contribution any time you receive a raise. Remember, because of inflation, the power of the dollar when you retire will be less than it is today. This is why it’s important to be consistent.

Trust the Process

Retirement saving is not a get-rich-quick scheme. There’s no magic wand that will turn your contributions into a nest egg in a year or two. As Mr. Bergman likes to point out, the retirement system works. You just need to trust the process. Not only does this include starting early and being consistent with your contributions, but other factors as well. Withdrawing is the first no-no. Anytime you take funds from the account, it lessens the power your savings have. Further, you’ll pay taxes and might be hit with penalties. Another mistake is when you “set it and forget it.” It makes more sense to check your holdings periodically and adjust to align with your financial goals at retirement.

Final Take

The government is giving us the golden ticket to retirement wealth. You just need to be proactive with your saving. Unfortunately, they don’t have Retirement 101 in schools. The younger generation needs to realize that while retirement is decades away, it pays to start saving as soon as possible. It’s up to those in the know, such as parents, teachers and other professionals to teach our children and young adults.

Creating financial goals at retirement is just the start. Actually going through with them is the tough part. Once you get started, you can start seeing the benefits. You just have to trust the process!

Thanks for listening and be sure to check out all of Adam Bergman’s podcasts on our SoundCloud page.


Latest Content

Send Us a Message!