Investors with a lot of money saved still don’t feel very confident about their retirement prospects.
It is according to a recent study conducted by Natixis Investment Managers, which showed that 40% of respondents said it would take a miracle to retire. And it was a survey of people who have at least $100,000 in investable assets, which is more than many of their peers.
Are these worried workers right? Will typical retirees need a miracle to be able to exit the workforce with a nest egg that can sustain them through their final years?
Retiring with financial security is possible – no miracles required
Many of the investors who responded to the survey were overly pessimistic about their retirement prospects. Yet many people worry about making ends meet once their paychecks stop coming.
The reality is that saving a retirement nest egg that offers great financial security is within the reach of almost anyone, especially if they start early enough – or are willing to make the necessary sacrifices to build up their account balances. they get delayed start investing.
What is needed is not a miracle. Instead, you need the following:
- A detailed estimate of how much you need to save for your retirement: There are several ways to set investment goals, but one of the easiest is to assume that you will need 10 times your last annual salary.
- A breakdown of your big goal into smaller monthly goals: Breaking down a big goal into monthly or even weekly amounts lets you know how much to invest each month and helps you make sure you’re on track. Investor.gov calculators make it easier to determine your monthly savings target if you know how much savings you’ll ultimately need.
- A budget that favors savings: Once you have that monthly savings amount, treat it like your rent or mortgage and other bills, making it a top priority in your budget. Build other expenses about that goal, rather than seeing savings as an afterthought.
- Automatic transfers to your retirement account: Have this monthly amount automatically invested in your 401(k) plan or other tax-efficient retirement plan. This saves effortlessly.
- A solid investment strategy: Finally, build a diversified portfolio with a good mix of assets appropriate for your age. You can invest in ETFs if you don’t know how to pick individual stocks or don’t want to spend a lot of time researching different assets to buy.
Whether you’re a high earner with plenty of money already saved up or you’re just getting started investing, if you follow all of these steps, you should be able to retire at a reasonable age with a generous nest egg – even if no miracles happen. product. .