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Almost 80% of Americans Fear a Retirement Age Increase — Here’s the Real Reason Why

INVESTING
Last updated April 24, 2024 | By FinanceBuzz Editors

There may be nothing more contentious in U.S. politics than a potential raise of the retirement age.

And now, with the election cycle in full swing, it seems many Americans are considering the possibility of it actually happening — and how they would feel if that limit were to increase in a few years.

The truth is that it's not just a potential delay in Social Security benefits that has Americans worried. In fact, it’s something far more painful and hard to accept.

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The Real Reason so Many Americans are Worried About Retirement

According to a poll from Quinnipiac University, nearly 80% of Americans “would oppose raising the full retirement age for Social Security from 67 to 70.”

But that makes sense — why would anyone want benefits paid out later in life?

No. The real reason that so many Americans fear retirement is that, according to the very same poll, 68% of Americans feel they won’t have enough money to retire comfortably.

This sentiment tracks with recent estimates on American retirement savings, and the findings are, well … grim.

While the suggested amount for retirement savings comes in at $555,000, the real percentage of American retirees who have saved that much is shockingly low — just 12%, according to Yahoo! Finance.

Revealed: Average Retirement Savings in America by Age — How do you Compare?

In the 2019 Survey of Consumer Finances, researchers pulled in data revealing the average retirement savings balance of different age groups.

While these figures reflect an average, some people may have more or less saved. The study did not reveal whether or not individuals were working with a fiduciary.

Where do you fall on this spectrum? Do you have more? Less?

Age group Average retirement savings balance
35 or under $30,170
35-44 $131,950
45-54 $254,720
55-64 $408,420
65-74 $426,070

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Realistic Tips to Help You Save for Retirement

If you want to start saving for retirement effectively, there are a few things to pay attention to at key points throughout your life:

Age 30:

Optimize your budget: This is especially true for people who have already started or plan to start a family in their 30s, which usually comes with more financial responsibilities.

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Increase your savings rate: While savings rates are often low in your youth, they can grow as your income does. For example, you could boost your savings rate by 1% annually, moving from 5% of your income in your early 20s to at least 15% in your 30s.

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Open your own investment accounts: Your 30s can be the time to begin investing on your own. For instance, consider opening one of the best Roth IRAs or best brokerage accounts to diversify your investment options and improve your tax strategy.

Get a 3% match on retirement contributions when you join Robinhood Gold for a monthly subscription fee.3

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Age 40:

Get out of debt: It can be tough to save when debt and interest charges weigh you down, so work on reducing or eliminating your debt balances.

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Check your asset allocation: Annually reviewing your asset allocation is wise. You might have a stock-heavy portfolio in your youth for compounded growth. As you age, consider shifting to a more conservative investment mix.

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Start investment accounts for your children: If you have kids, you may want to start investment accounts for them in your 40s, if not sooner. For instance, you may decide to start a tax-advantaged 529 plan to save for their college education.

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Age 50:

Max out your contributions: Even if retirement is near, maximizing retirement contributions can be beneficial. These accounts, like 401(k) plans and traditional IRAs, offer tax benefits that can enhance your retirement savings.

Use catch-up contributions: If you’re over 50, you can make additional catch-up contributions to retirement accounts like 401(k)s and IRAs. In 2023, you can add up to $7,500 extra to 401(k)s and $1,000 to IRAs, helping you reach your retirement goals faster.

Keep your money invested: Withdrawing from your retirement account for expenses can affect your investment strategy and retirement funds. Non-Roth accounts usually have an early withdrawal penalty before age 59 1/2. So, it’s advisable to continue earning and using your income until penalty-free withdrawals are possible.

Get a 3% match on retirement contributions when you join Robinhood Gold for a monthly subscription fee.3

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Learn Our #1 Secret for Quickly Building a Strong Financial Base for a Comfortable Retirement

You already know how much you have in your savings account right now. And if it’s anything less than the amounts in the chart up above, that may spell trouble for you and your retirement down the line.

And despite the realistic tips presented on this page, you may need something a little more powerful for your own finances, depending on where you fall on the scale. If that’s you, there is one approach we recommend …

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FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.