How Much is in Your Savings?
Even though the recession isn't in full effect it's still effecting how Americans go about their finances. According to a survey of 1,000 people that was released Monday, over half of non-retired Americans feel that they aren't saving enough to retire comfortably.
The survey said that just 41% of Americans save outside of work programs, and only two thirds of people have enough money saved to cover emergencies or unexpected expenses.
A separate survey was also released on Monday by Bankrate.com says that just 55% of Americans have more in savings than they owe to the credit card companies. Stephen Brobeck, executive director of the Consumer Federation of America, says the best way to free up money to put into savings is to pay off your credit cards as soon as possible. No one can save when they're losing their money to interest charges.
The survey also says that 70% of people who make 75,000 plus had more savings than debt while 41% people making 30,000 had more savings. Less than half of those with low-to-moderate incomes even have a money market or savings account.
Three of the recommended ways to begin saving money is to open a savings account, set up automatic transfers, and to max out 401(k) contributions. The best thing you can do is start saving early and don't stop for anything.
Once you get your money into savings or your 401 (k), and you retire, the most common strategy to make your money last for 30 years is to withdraw 4% every year while adjusting for inflation. This strategy can increase your available spending money by 9%. That said this is your life in retirement so blindly following a rigid system isn't the best plan, always be flexible, and adjust as needed. This is your best chance at having a fun, happy, financially supported retirement.
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