by Emily Hechler 
Retirement may seem far away or like there are only a few short years to go. As a young adult, I’ve been able to see the real-life implications of planning for retirement well and unfortunately failing to do so. Between careers, families, housing costs, and everyday expenses, saving for retirement can feel overwhelming.
Current Status of American Retirement Savings
The Federal Reserve conducted a Survey of Consumer Finances to see how much Americans have saved for retirement. An overview of the results is below. The average is the sum of all the participants divided by how many participants answered the survey. The median is the exact middle in value, which is why these numbers look dramatically different.
| Fed SCF Age Group | Average Retirement Savings | Median Retirement Savings |
| Under 35 | $49,130 | $18,880 |
| 35 to 44 | $141,520 | $45,000 |
| 45 to 54 | $313,220 | $115,000 |
| 55 to 64 | $537,560 | $185,000 |
| 65 to 74 | $609,230 | $200,000 |
| 75+ | $462,410 | $130,000 |
Retirement Savings Goals
It can be helpful to compare your savings to national averages, but those numbers don’t tell the whole story. This data should be taken with a grain of salt. These numbers aren’t as effective if you don’t compare them to your actual salary and lifestyle. With these numbers in mind, review the table below to learn how much you should have saved for retirement.
| Age | 30 | 40 | 50 | 60 | 65-75 |
| Savings Goal (times of annual salary) | 1x | 3x | 6x | 8-10x | 10-12x |
Now compare this data to the average or median retirement savings. Are you on track or behind compared to the average retirement savings? What about the median?
Numbers in Real Life
Let’s go through an example of a 30-year-old named Steve, who currently makes $49,000 per year, and has the average amount of $49,130 saved for his retirement. Since this is roughly the same as his salary, he is on track for his retirement savings.
Based on the chart, Steve should have $147,000 in his retirement savings by age 40. This is assuming that his income remains the same. Note that the average retirement savings amount is behind the goal.
Now, when Steve turns 50, he should have $294,000 saved for retirement. But the average for this age band is $313,220. What happened?
This is a great example that shows it is possible to catch up on your retirement savings if you are behind. Based on this data, this is what a lot of Americans are doing.
How do you get caught up on retirement savings?
Catching Up Under Age 50
If you are under the age of 50, you fortunately have time to catch up your retirement savings. Here are tips on how you can get caught up.
Take Advantage of an Employer Match
Many employers offer some type of match in their company’s retirement plan. This means that for every certain percentage of your income that you contribute to a retirement plan, they’ll also contribute money toward your retirement account.
Some employers make an equal match, where they’ll match your contribution up to a certain point. If you contribute 3% of your income, they’ll contribute another 3%. Some employers match a different percentage of your income, where they’ll contribute 2% for every 3% you contribute. Look at your employer’s retirement plan rules and contribute at least the percentage to get the maximum contribution from your employer.
Contribute More
Retirement plans have annual contribution limits set by the IRS, which are periodically adjusted. This means that as long as you budget for it, you can likely increase your contribution to your retirement plan. Employer matching contributions generally do not count toward the employee contribution limit.
Increase Your Percentage
According to Fidelity, aim to save 15% of your pre-tax employer income, including your employer match if you have one. However, that 15% rule doesn’t always match the savings goals shown earlier. If you start contributing 15% at age 24, you can have approximately one year’s salary saved by age 30.
Catching Up Over Age 50
If you are over the age of 50, you don’t have as much time to get caught up on your retirement contributions since you’re closer to retirement. Here are some tips on how you can get caught up.
Aim for a Higher Rate
If you are still behind on your retirement savings, you need to be saving a larger percentage of your income for retirement. This is because you have less time for compound growth to effectively grow your money while you work and contribute more.
Use Catch Up Benefits
Catch up contributions allow employees age 50 and older to go beyond the $24,500 limit to contribute more to their retirement plan. Contribution rules vary by account type and IRS limits. For tax purposes, you can increase your contribution to a Traditional IRA or Roth IRA for the previous year until Tax Day of the current year.
Get on Track
It can be overwhelming and discouraging to learn that you aren’t saving enough for retirement, especially when money is tight right now. At Alltru, we offer free appointments with trained financial counselors to help you meet your financial goals. You don’t have to be a member to get an appointment, and there’s no obligation. As a member though, you can open an IRA to start saving for your retirement. Let’s save for your future together.
