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American workers earning six-figure incomes have mixed feelings about whether they have enough saved for retirement.
Only about half of workers making more than $100,000 a year feel they are contributing enough to their 401(k) to have a secure retirement in the future, according to CNBC’s August “Your Money” survey.
According to Vanguard 2023, the median retirement account balance for people with incomes between $100,000 and $149,000 is $104,155. “How can we save America?” report. For people with incomes above $150,000, that number jumps to $201,301.
The amount of money you need to sustain yourself in retirement depends on a variety of factors, including the age at which you plan to retire, whether you plan to continue working part-time, and the type of work you do. Make a plan to spend your money. You may also need to save more money if you plan to retire in a state with a higher cost of living.
However, many people aim to retire as millionaires. According to research by Charles Schwab & Co., the average American believes they will need to have about $1.8 million saved by retirement. 2023 401(k) Participant Survey.
With this in mind, CNBC calculated how much you should save each month if you earn $150,000 and want to retire with $2 million at age 67. These calculations are based on starting ages of 25, 30, and 35 and assume you start at $0. balance. It also doesn’t take into account unpredictable life events such as layoffs, promotions, or sudden changes in the stock market.
- To earn a 3% annual return: $1,979 per month
- To earn a 5% annual return: $1,169 per month
- Earn 7% annual return: $657 per month
- To earn a 10% annual return: $258 per month
- To earn a 3% annual return: $2,463 per month
- To earn a 5% annual return: $1,562 per month
- Earn 7% annual return: $954 per month
- To earn a 10% annual return: $429 per month
- To earn a 3% annual return: $3,108 per month
- To earn a 5% annual return: $2,117 per month
- Earn 7% annual return: $1,400 per month
- To earn a 10% annual return: $718 per month
Don’t panic if you don’t yet have the savings you’d like for retirement. There’s still time to grow your contributions with compound interest.
In that regard, it’s important to be aware of the contribution and income limits for different types of retirement accounts.
The contribution limit for 401(k), 403(b), and most 457 plans in 2023 is $22,500. People over 50 can donate Additional $7,500 In the same way.
If you’re contributing to or planning to open a Roth Individual Retirement Account, keep the following in mind: income limit. In 2023, single income earners with incomes below her $138,000 will be able to contribute up to $6,500, those age 50 and older can donate an additional $1,000. If your income is more than $138,000 but less than $153,000, you can donate a reduced amount, but if your income is more than $153,000, you can’t.
However, don’t just focus on increasing your account balance. Instead, many financial experts advise paying attention to your savings rate. Your savings rate is the percentage of your income that you put aside each year for retirement. Recommended by Fidelity 15% annual savings rate, including employer match where available.
And when it comes to saving for retirement, “the key is to take action,” Fidelity says in the article. August’s “Perspective” report.
“Don’t be discouraged if you haven’t reached your most recent milestones. There are ways to catch up on future milestones through planning and saving,” the report says.
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check out: If you earn $80,000 a year, how much do you need to save each month to retire with $1.5 million?
