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With the youngest baby boomers now 61, much of the generation is already retired or nearing retirement. However, data shows many have inadequate savings and may struggle to maintain their standard of living.<\/p>\n<\/p>\n
In fact, some boomers have saved so little that younger Americans could surpass them with just a few years of disciplined saving and investing.<\/p>\n
Here\u2019s a closer look at the boomers\u2019 financial state \u2014 and what it takes to get ahead on the path to financial freedom.<\/p>\n
At the end of 2024, boomers had an average 401(k) balance of $249,300, according to Fidelity Investments. (1)<\/p>\n
Many also hold other assets such as savings accounts, brokerage accounts and real estate. However, Fidelity also reports that the median net worth of households led by someone aged 65 to 74 is just $409,900. (2)<\/p>\n
These figures fall short of recommended retirement benchmarks. Fidelity suggests retirees should aim for savings equal to ten times their annual salary by age 67. With the median salary for Americans aged 55 to 64 at $65,936, according to SmartAsset, (3) this implies a target of about $659,360.<\/p>\n
Yet, most expectations are even higher.<\/p>\n
A Northwestern Mutual survey found that the average \u201cmagic number\u201d Americans say they will need for retirement is $1.26 million. (4) With average savings and net worth well below that figure, it\u2019s no surprise that about 40% of boomers say they are at least somewhat likely to outlive their savings. And, keep in mind, this figure is for a typical retirement \u2014 no retiring early factored in.<\/p>\n
With limited resources, many boomers may be forced to take on debt, rely heavily on Social Security, cut back their lifestyles or even return to work to maintain their quality of life.<\/p>\n
But if you\u2019re not part of this cohort, there\u2019s still time to chart a different course. And if you are there are still a few things you can do.<\/p>\n
Whatever your personal \u201cmagic number\u201d for retirement may be, starting early and staying consistent can get you there \u2014 often well ahead of where the average boomer stands today.<\/p>\n
The median salary for someone aged 35 to 54 ranges between $69,472 and $70,512, according to SmartAsset. Fidelity recommends having 2x your salary by age 35, 4x by 45 and 7x by 55. To hit these milestones, Fidelity suggests saving 15% of your pre-tax income, invested in a diversified portfolio focused on growth and income.<\/p>\n
For example, if you earn $70,000 and consistently save 15% per year in a low-cost S&P 500 index fund \u2014 which has averaged about 10% annual returns since 1957 \u2014 you could reach 2x your income in around nine years and 7x in about 18 years.<\/p>\n
If you\u2019re not sure how to find an extra 15% in your budget for retirement investments, consider starting small with an automated investing platform like Acorns<\/a>, which can help you squirrel away your spare change.<\/p>\n By signing up and linking your bank account<\/a>, Acorns automatically rounds up the price of everyday purchases to the nearest dollar and deposits the difference into a smart investment portfolio for you.<\/p>\n With consistent contributions to blue-chip ETFs like VOO, which tracks the S&P 500, Acorns ensures your money can grow steadily, and your spare change can be a real contribution to your retirement fund.<\/p>\n But if saving your spare change isn\u2019t enough, Acorns also lets you set up recurring monthly contributions for your portfolio. The best part? If you sign up with just a $5 monthly deposit Acorns will give you $20<\/a> to get your investment journey off on the right foot.<\/p>\n With consistent investment on these terms, you could surpass the average boomer\u2019s 401(k) balance of $249,300 in just over 12 years, provided you\u2019re saving that 15%.<\/p>\n In short, consistency pays off \u2014 and you don\u2019t need to be wealthy to build a secure retirement. If you want to reach your target even faster, you can increase your savings rate or grow your income over time.<\/p>\n One of the best ways to find room in your budget for more investing is to ensure you\u2019re consistently tracking your saving and spending. With Monarch Money, this process is easier than ever.<\/p>\n Monarch Money<\/a> is a financial management platform that offers an all-in-one tool to help you track investments, spending and budgeting. The platform even offers personalized advice so you can feel confident about your money, and learn to create a budget and financial plan that helps you set aside the right percentage of your income for retirement savings.<\/p>\n You can also feel confident about sharing your financial data with Monarch Money \u2014 the app is protected by Plaid for secure data integration, and employs multi-factor authentication at login, so you can keep your accounts safe. Plus, they offer a shared account view so you and a spouse can plan for the future together.<\/p>\n Download the app now for a seven-day free trial<\/a>. After that, you can get 50% off your first year with the code MONARCHVIP.<\/p>\n Even more important than consistent saving is to ensure that your money is invested wisely.<\/p>\n Diversifying your retirement portfolio will spread your risk across multiple growth vehicles and can prevent any dips in the stock market from drastically reducing your portfolio’s worth in the last years before you retire. Alternative assets are one area that can provide some protection against a broader downturn in stocks and bonds. This asset class includes real estate, private equity, cryptocurrency and the like.<\/p>\n But one alternative asset that\u2019s proven its resilience, especially this year, is gold.<\/p>\n Gold prices reached historic highs of $4,300 per ounce in mid-October. (5) Often, this precious yellow metal is seen as inflation-resistant and a \u201csafe haven\u201d investment from market turmoil.<\/p>\n You could get in on the market for this commodity and get tax advantages for retirement to boot, by investing in a gold IRA with Goldco.<\/p>\n Opening a gold IRA with the help of Goldco<\/a> allows you to invest in gold and other precious metals while also providing the significant tax advantages of an IRA.<\/p>\n With a minimum purchase of $10,000, Goldco offers free shipping and access to a library of retirement resources. Plus, the company will match up to 10% of qualified purchases in free silver<\/a>.<\/p>\n If you\u2019re curious whether this is the right investment to diversify your portfolio, you can download your free gold and silver information guide today<\/a>. Just keep in mind that gold is often only one part of a well-diversified portfolio.<\/p>\n Real estate is another high-growth avenue for diversifying your retirement. While not everyone has the capital to invest in a rental property, you can now invest in shares of properties through Arrived.<\/p>\n Backed by world class investors like Jeff Bezos, Arrived\u2019s easy-to-use platform allows you to invest in shares of vacation and rental properties<\/a> \u2014 which can potentially give you a passive income stream without the extra work that comes with being a landlord.<\/p>\n To get started, simply browse through their selection of vetted properties, each picked for its potential appreciation and income generation. Once you choose a property, you can start investing with as little as $100<\/a>, potentially earning quarterly dividends.<\/p>\n Meanwhile, if you\u2019re an accredited investor, Homeshares allows you to gain direct exposure to hundreds of owner-occupied homes in top U.S. cities<\/a> through their U.S. Home Equity Fund \u2014 without the headaches of buying, owning or managing property.<\/p>\n The fund focuses on homes with substantial equity, utilizing Home Equity Agreements to help homeowners access liquidity without incurring debt or additional interest payments.<\/p>\n This approach provides an effective, hands-off way to invest in high-quality residential properties<\/a>, plus the added benefit of diversification across regional markets \u2014 and all with a minimum investment of $25,000.<\/p>\n With risk-adjusted target returns ranging from 14% to 17%, Homeshares<\/a> could unlock lucrative real estate opportunities, offering accredited investors a low-maintenance alternative to traditional property ownership.<\/p>\n And for a limited time, Homeshares can provide Moneywise readers an exclusive 5% bonus for IRA investments<\/a>.<\/p>\n Read more: Warren Buffett says you can’t buy time \u2014 but real estate investors have found this 1 loophole<\/a>. See how they\u2019re buying back hundreds of hours a year (for absolutely free)<\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines<\/a>.<\/p>\n Fidelity (1<\/a>), (2<\/a>); SmartAsset (3<\/a>); Northwestern Mutual (4<\/a>);\u00a0 APMEX (5<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"PeopleImages \/ Shutterstock Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content…\n","protected":false},"author":2,"featured_media":233536,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[8913,45,49,48,4190,88295,133,2155,90,131,132,968,1705,12985,15381,55167],"class_list":{"0":"post-233535","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-baby-boomers","9":"tag-business","10":"tag-ca","11":"tag-canada","12":"tag-dave-ramsey","13":"tag-fidelity-investments","14":"tag-finance","15":"tag-financial-freedom","16":"tag-jeff-bezos","17":"tag-personal-finance","18":"tag-personalfinance","19":"tag-real-estate","20":"tag-retirement","21":"tag-retirement-savings","22":"tag-robert-kiyosaki","23":"tag-savings-accounts"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/233535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=233535"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/233535\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/233536"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=233535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=233535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=233535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}