My tax-advantaged retirement account from my employer offers a valuable piece of information on our annual statements.
It's the amount of monthly retirement income I can expect, given the amount I have in there now.
This amount really was nothing to write home about. (It amounts to about 6% of my gross income.) But I'm forty, so I still have time to bolster this. Whether or not my age group has more saved up or less saved up than I do doesn't matter, just like it doesn't matter how much or little debt I have compared to other people. I need to look at myself, and my family's needs.
This should be a feature of each and every annual statement from a retirement investment account. It's a very helpful one. It's not unlike the payoff statements that are now part of every credit card bill. (Credit card companies don't want you to know how much you'll pay if you make just the minimum payments, or how long it will take, but thanks to the CARD Act, they have to provide this information now.)
Starting early is the biggest way to get a head start on retirement savings. Starting late makes it virtually impossible to catch up, short of winning the lottery. So the more wake-up calls that urge you to get started early, the better.
May as well do it now. The clock is ticking.
Every time I log in, I get a screen that tells me what I should expect to receive assuming I keep contributing, that the stock market performs reasonably well, and it also adds social security estimates. I still see a pretty good shortfall compared to what it estimates I need (a percentage of my current income adjusted for inflation) so it always reminds me that I’ve got a lot of work to do.
I think that is a great idea! There is one problem though, what if you have other accounts. How many people just work for one employer these days?
Most of my retirement savings are with Fidelity and they have online retirement calculators but don’t have the “estimated Income” feature. That would be nice to have. Maybe they do and my investment strategy just baffles them? Lol.
Great post! Great tips! My problem is how much they charge you if you have a emergency and take the mony out early. Its your money why do they charge so much??
That is a great feature. I’ve never seen that with Vanguard, but maybe I just don’t know where to look. The problem with retirement calculators I’ve tried it that they assume I’m going to need 80% of my income and I don’t think we’ll need that much.
I think we all need a retirement wake up call once in a while. It’s easy to get sidetracked with other savings goals and completely forget about our future. Thanks for the reminder.
I know that neither my nor my husband’s retirement accounts have that feature; from time to time, I will use an investment calculator to see how much I’ll need, but I know that at my age (30) it’s really a floating estimate. It’ll only go up from here.