5 Ways to Tell If You’re on Track for Retirement — and 5 Things to Do if You Need to Catch Up
Retirement planning is a vital part of financial wellness, but how do you know if you’re on track? Here are five ways to assess your progress, followed by five expert-recommended strategies to catch up if you’re falling behind.
5 Ways to Tell If You’re on Track
- Savings Benchmarks Financial advisors recommend having savings equivalent to your annual salary by age 30, three times your salary by 40, and six times your salary by 50. If your savings align with these benchmarks, you may be on track.
- Retirement Calculator Use online retirement calculators to assess if your savings will cover your estimated retirement expenses. Tools like Fidelity’s Retirement Score or Vanguard’s Retirement Nest Egg Calculator provide a personalized snapshot.
- Debt-to-Income Ratio Evaluate your debt load. Carrying minimal debt into retirement ensures that more of your income can be allocated toward living expenses rather than interest payments.
- Projected Expenses Have you calculated your expected retirement lifestyle expenses? These include housing, healthcare, travel, and daily living costs. Comparing this with your savings gives clarity.
- Diversified Income Streams Are you relying solely on Social Security or a single retirement account? Diversified income sources, such as pensions, investments, or rental properties, indicate greater financial stability.
5 Things to Do If You Need to Catch Up
- Boost Contributions Increase your retirement account contributions. Take full advantage of employer matching in 401(k) plans and utilize catch-up contributions for those 50 and older. For 2025, individuals over 50 can contribute an additional $7,500 to their 401(k).
- Invest Strategically Shift from low-risk, low-return options to higher-yield investments if you’re behind. Consider a diversified portfolio with a mix of stocks, bonds, and mutual funds. Consult a financial advisor for guidance tailored to your risk tolerance.
- Reduce Expenses Cut unnecessary expenses to free up money for savings. Downsizing your home, reducing discretionary spending, or eliminating subscription services can significantly impact your ability to save more.
- Delay Retirement Working a few extra years can make a substantial difference. Delaying Social Security benefits increases monthly payments by about 8% annually until age 70. Additionally, continuing to work allows you to save more and let investments grow.
- Generate Extra Income Explore side hustles or part-time jobs to supplement your savings. Options like consulting, freelancing, or renting out property can provide additional income streams.
Final Thoughts
Retirement planning is not one-size-fits-all, but regular evaluations and adjustments can keep you on track. Assess your savings, calculate your expenses, and diversify income sources to gain a clear picture of your retirement readiness. If you’re behind, don’t panic. Small but consistent actions—like saving more, investing wisely, and cutting costs—can help you bridge the gap and achieve your retirement goals.
[return to top]
Wellness Programs Gain Traction in Individual Health Plans
What’s New for Medicare in 2025?
5 Ways to Tell If You’re on Track for Retirement — and 5 Things to Do if You Need to Catch Up
Why Life Insurance is a Must-Have for Homeowners
The Digital Shift in Healthcare: Embracing Telehealth and Virtual Care
The information presented and conclusions within are based upon our best judgment and analysis. It is not guaranteed information and does not necessarily reflect all available data. Web addresses are current at time of publication but subject to change. SmartsPro Marketing and The Insurance 411 do not engage in the solicitation, sale or management of securities or investments, nor does it make any recommendations on securities or investments. This material may not be quoted or reproduced in any form without publisher’s permission. All rights reserved. ©2023 The Insurance 411. www.theinsurance411.com Tel. 877-762-7877.