Most Americans want to retire by 67, a 2020 TD Ameritrade report finds. But are they on track?
The report, which surveyed 2,000 U.S. adults ages 40-79 with at least $25,000 in investable assets, finds many Americans may have a ways to go, even those approaching their golden years. Nearly two-thirds of 40-somethings have less than $100,000 in retirement savings and 28% of those in their sixties have less than $50,000.
While this report didn't survey younger Americans, a 2019 TD Ameritrade survey found that 66% of millennials don't feel on track when it comes to saving for retirement, mostly due to the burden of housing costs.
Here's a breakdown of how much four different age groups have in retirement savings.
Click on the chart to enlarge.
Age 40-49
41% have less than $50,000 saved
18% have $50,000 to $99,000 saved
27% have $100,000 to $500,000 saved
7% have $500,000 to $999,000 saved
7% have $1 million or more saved
Age 50-59
37% have less than $50,000 saved
16% have $50,000 to $99,000 saved
32% have $100,000 to $500,000 saved
6% have $500,000 to $999,000 saved
8% have $1 million or more saved
Age 60-69
28% have less than $50,000 saved
10% have $50,000 to $99,000 saved
36% have $100,000 to $500,000 saved
14% have $500,000 to $999,000 saved
12% have $1 million or more saved
Age 70-79
20% have less than $50,000 saved
13% have $50,000 to $99,000 saved
36% have $100,000 to $500,000 saved
19% have $500,000 to $999,000 saved
12% have $1 million or more saved
If you're feeling behind when it comes to saving for retirement, here are three effective strategies to help increase your savings.
1. Put your money to work today
The sooner you start saving and investing, the less you'll have to save each month to reach your goals, thanks to the power of compound interest.
If you start at 23, for instance, you need to save about $420 a month to be a millionaire by 67. That's assuming a 6% average annual investment return. If you start at 35, on the other hand, you'd have to set aside $900 a month to reach the same goal.
One of the simplest ways to get started is to fund your employer-sponsored 401(k) plan — and take full advantage of the company match if one is offered. If your company doesn't offer a 401(k), or you're self-employed, consider other options, like contributing to a traditional or Roth IRA.
2. Automate your contributions
If you automate your retirement savings — meaning, you have a portion of your paycheck sent directly to a retirement account, such as a 401(k), Roth IRA or traditional IRA — you'll never even see the money you're setting aside and will learn to live without it.
Ideally, you'll want to work your way up to saving the expert-recommended 10% of your pretax income, but if you're only comfortable with putting away 1%, start there and gradually increase your contributions.
Once you've set up automatic transfers, check to see if you can also set up "auto-increase," which allows you to choose the percentage you want to increase your contributions by and how often. This way, you won't forget to up your savings or talk yourself out of setting aside a larger chunk when the time comes.
3. Increase your income
The more money you bring in, the more you can put toward savings. The simplest way to increase your income may be to negotiate a raise.
Another option is to develop an additional income stream in addition to your regular job. Think of creative ways to make more money, like driving for a ride-share app, tutoring or investing in real estate. For more inspiration, check out five high-paying side jobs and how to launch a profitable side hustle.
Don't miss: The No. 1 reason millennials are struggling to save for retirement—and it's not debt
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