With the increasing prices of nearly everything, Americans are anxious on whether or not they have enough funds to cover their basic needs when the inevitable retirement comes into the picture, which, for many, is not a “pretty picture” to look at.
Forbes.com, in a report, said, “small savings can play a crucial role in providing a more secure retirement by supplementing Social Security and other pensions.”
The report said that for those who do not need to claim their Social Security immediately may opt to delay claiming it. Instead, they may get small withdrawals from their automatic individual retirement accounts (IRAs).
Described as a “promising option,” this means an increase “in Social Security payments by as much as 7 to 8 percent for every year that the benefit is deferred.”
“Waiting to claim Social Security can be particularly helpful to married couples, because when one spouse dies the surviving spouse continues to receive the higher of the couple’s benefits whether or not he or she was the primary earner,” the report read.
Several online references are available to help one know which IRA plan, also described as an “egg nest,” best fits you.
But how much does one really need? And when do you start saving for one’s retirement?
Saving for one’s retirement remains a challenge for many Americans. A Washington Post noted that “too many people are reaching retirement age with a paltry account balance that is unlikely to carry them through their later years.”
Many financial and investments experts say that the key to funding one’s retirement is to save not just as early as possible but also “as much as you can,” said a CNN in a report titled, “Ultimate guide to retirement.”
“As a general rule, you’ll need at least $15 to $20 in savings to cover each dollar of the annual shortfall between your income and your expenses. So for example if your projected retirement expenses exceed Social Security and pensions by $20,000 a year, you might need a nest egg of $300,000 to $400,000 to bridge the gap,” the report added.
Ideally, saving for retirement should start as early as possible to give one’s money more time to grow as “each year’s gains can generate their own gains the next year – a powerful wealth-building phenomenon known as compounding.” CNN even recommended as early as one’s 20’s.