As we enter the New Year, your financial security be top of mind as you work towards your goals. Here are some saving statistics to help motivate you.
There are many ways to save using different wealth-building accounts and strategies to help ensure you’re not putting all of your savings into one account or investment strategy. This article presents savings statistics that may surprise and motivate you to save more this year. Use these savings statistics to gauge your savings and then take the appropriate actions toward these age-related milestones.
Many people have savings accounts, and the average balance can vary. But if your balance is near zero, it may indicate that you’re living paycheck to paycheck. Here’s how much Americans have in their savings accounts by age:
Source: The Average U.S Savings Account Balance by Age, AdvisorSmith.
Retirement savings accounts can be Roth IRAs, which fund with after-tax contributions, 401(k)s, 457(b) plans, and other pre-tax retirement savings accounts that fund with pre-tax contributions. Basically, see how your retirement savings combined balances compare based on your age to these approximate values:
Source: How America Saves 2022, Vanguard.
Retirement savings contributions are easy to automate and can automatically increase with age. Monthly contributions are set up as a percentage of your monthly income and can be a starting point to determine if you need to save more to meet the IRS contribution limits. Although, your financial professional can help you plan for your retirement by inputting your current retirement savings balances, monthly contributions, and assumed portfolio returns to help you understand if you’re on track or may have a retirement savings gap. How do these savings statistics encourage you?
Source: How America Saves 2022, Vanguard
Additionally in 2023, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increasing to $22,500, up from $20,500.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is increasing to $7500, up from $6500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan who are 50 an older can contribute up to $30,000 starting in 2023. The catch-up contribution limit for employees aged 50 and over participating in SIMPLE plans is increased to $3500, up from $3000.
In addition, the limit on annual contributions to an IRA is increasing to $6500, up from $6,000. The IRA catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000. You can learn more about 2023 retirement savings contributions by visiting the IRS.gov website or contacting your financial professional to determine how you can save in 2023. All things considered, I hope these savings statistics help motivate you or encourage you.
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In addition, Lifetime Solutions specializes in providing strategies and guidance for those who are seeking a better lifestyle in retirement. If you have retirement savings of five million dollars or $50,000, we can ensure it works as hard. As a result, we offer our experience and knowledge to help you design a custom strategy for financial independence. Contact us today to schedule an introductory meeting!