If you haven’t started saving for retirement, now is the time.
Fox Business reports that Fidelity Investments, a multinational financial services corporation, is revealing the dollar amount needed to live a comfortable lifestyle. The secret is the number doesn’t exist. Fidelity’s Vice President of Workplace Investing Thought Leadership Michael Shamrell, says putting a dollar amount on retirement savings is too much pressure.
“That can seem daunting,” Shamrell said. “The last thing you want to do is put out a dollar amount that’s going to be discouraging.”
The bottom line is that Fidelity wants people to remember that saving for retirement is necessary.
Two of the most common questions advisers get surround how much money is needed to save and if a person is on track to reach that goal. The seasoned adviser explains that there are different circumstances that don’t allow an amount to be present. Contradicting reports, Shamrell says, don’t attest “for people in different geographical areas of the country where there may be different cost of living.
“The new guidelines listed by the firm hope to change things. These guidelines are applicable to you and your savings journey,” he said.
“And again, help you understand what you need to save as a multiple of your salary as opposed to just some dollar amount that’s out there that may or may not be realistic for you.”
Fidelity recommends having at least 1x your annual salary saved by age 30. Following that, it’s 3x your salary by 40, 6x by age 50, and so on. If those numbers seem unrealistic, Fidelity says there are other ways to catch up, pointing out that retirement saving is a marathon, not a sprint. Life happens, jobs are going to come and go, the economy is going to go up and down. The best thing that we can encourage people to do is take a long-term approach,” Shamrell said.
“Don’t try to make changes to your savings strategy based on short-term events. Try to take a long-term approach and make sure that any changes you might be making are part of your long-term strategy.”
In August 2023, Fidelity released a report showing good signs toward retirement. CNN reports the average 401(k) balance went up to $112,400, 39% higher. People saving regularly since 2008 should now have an average balance of $499,000.
RELATED CONTENT: Can Your Retirement Fund Your Next Business?
