SmartAsset: If you are over the age of 50, here's how you need to saveAs markets tumble, folks nearing retirement are scrambling to locate strategies that will help them protect their nest eggs and grow their wealth. But if you’re over 50 and currently in the workforce, you may specifically want to consider a tweak to your savings that could benefit you in this current climate. T.Rowe Price recently released data that illustrates how increasing your retirement savings now could help you contend with market losses. We’ll go over the suggested savings strategies and how workers on the back nine of their careers can boost their retirement preparedness.
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What T. Rowe Price Says Workers Over 50 Should Do
T.Rowe Price’s recent study contends that workers who are over 50 years old may consider increasing their rate of savings to help make up for losses or low returns in a struggling market. The financial institution typically suggests that workers save 15% of their annual income for retirement, but for those in the 50 to 65 age range, T. Rowe Price recommends increasing that savings rate and potentially putting off retirement.
“For those close to retirement but unable to meet their retirement savings benchmarks, they might consider delaying retirement for a year or two, taking part-time work in retirement, or making spending adjustments,” said Judith Ward, the thought leadership director at T.Rowe Price, in a statement.
Suggested Retirement Savings Strategies
SmartAsset: If you are over the age of 50, here's how you need to saveT.Rowe Price bases this advice on a typical saving pattern for pre-retirees. One of the patterns includes a savings benchmark. This benchmark is based on individuals or couples with a current household income between $75,000 and $250,000.
The data assumes that individuals begin their savings rate at 6% when they are 25 years old. And from that point on, they increase their savings rate by 1% until they reach their goal.
For those nearing the end of their careers, boosting retirement contributions to over 15% can help them sock away sufficient funds for their golden years. Making catch-up contributions to 401(k) and individual retirement accounts (IRAs) can help pre-retirees bolster their nest egg.
Even amid the bear market and recent volatility during the first half of 2022, 95% of 401(k) participants didn’t make any investment exchanges, T. Rowe Price noted. But with less of a time horizon to recoup losses, retirement savers who increase their retirement contributions during a down market stand to enter retirement in a better position.
Workers 50 and older should calculate their income and spending needs before they’re ready for retirement. They should also estimate their Social Security benefits, along with their state and federal taxes.
SmartAsset: If you are over the age of 50, here's how you need to saveSavers between the ages of 50 and 65 may want to increase their savings rate amid market volatility. For pre-retirees, it is important to estimate your income and spending habits before you enter retirement. Keeping tabs on your finances will help you secure successful financial wellness.
Planning for Retirement Tips
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
If you need help finding a balance for your portfolio, SmartAsset’s asset allocation calculator can help you determine what to invest in.
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