Are you prepared for your retirement? There are three studies published recently that made me think about this. First, the Vanguard Group, which tracks 5 million retirement accounts, published data that shows that in 2023, the average balance in an employer sponsored retirement contribution plan rose to 19%, a little over $134,000.
Second, Northwestern Mutual did a study on what Americans believe they need in order to retire comfortably. The new number jumped 15% to almost $1.5 million. Third, a new study by Prudential concluded that Americans were ten years to go before reaching retirement age. Our unprepared. Further, 67% of 55 year olds surveyed said that they fear they will outlive their savings.
Taken altogether, a clearer picture emerges. While Americans are saving more for retirement, their savings fall far short of what many want, and as a result, they feel unprepared for retirement. Confirming this, the data points to a rise in the number of silver squatters. That's the name for people who expect to move in with their adult children.
It may feel that being prepared for retirement is a daunting task that is out of the reach for many, but don't let that stop you. There are some steps that you can take now to help you be better prepared for retirement. Obviously this isn't comprehensive, but to the people I talk to, these are the issues that commonly come up.
First, don't give up. It's easy to say, “Ugh, I'm so far behind, I'm just going to have fun, not save, and worry about this later.” That's not a good strategy. Second, avoid get rich quick schemes. If it sounds too good to be true, it probably is. Senior scams and crypto scams are two of the fastest growing areas, and they're beginning to merge together. Third, start now to save more towards retirement. Every little bit counts. And lastly, make sure your retirement portfolio is diversified because you don't know what's going to happen to the economy when you retire.
A diversified portfolio would include cash and stocks in a variety of industries or mutual funds. And it would also include a variety of bonds, both taxable and tax free. But don't forget to consider owning alternative assets like precious metals within your retirement portfolio. Alternative assets like gold historically go up when cash stocks and bonds go down, and vice versa. That diversification can be like an insurance policy to balance your portfolio's risk.
One way to add precious metals to your retirement portfolio is through a precious metal IRA. There are tax advantages for investing this way. My retirement portfolio is diversified with physical gold held in an IRA. This is also known as a gold or precious metal IRA. Mine is from U.S. Money Reserve.
