SPONSORED

How much retirement savings should I have? | 7 retirement tips if you are late to the retirement savings game

Feb 10, 2022, 4:30 PM | Updated: Feb 25, 2022, 4:01 pm
How much retirement savings should I have...
Photo: Adobe Stock

Teton Wealth GroupThis article that answers the question “how much retirement savings should I have?” is presented by Teton Wealth Group. Take their retirement mistakes quiz to see where you stand.


For a lot of people, it is not realistic to prioritize retirement savings earlier in their careers. Whether it’s kids college, buying that first home or just paying off debt. Saving for retirement wasn’t a priority… until now. We’ll outline several ways for you to supercharge your retirement savings when starting later in life.

1. The question “how much retirement savings should I have?” starts with building your emergency fund

How much retirement savings should I have

Photo: Adobe Stock

First things first, you will need to build a sufficient emergency fund. This fund should be able to cover your expenses for three to twelve months depending on multiple risk factors.

It is best to keep this fund in a high-yield savings account or money market account where you will have easy access to the funds for emergencies. You want to keep this money as liquid as possible.

2. Max out your employer-sponsored retirement account

How much retirement savings should I have

Photo: Adobe Stock

In most cases, a 401(k), 403(b), or employer-sponsored retirement plan is the easiest way to start saving for retirement. The first action to take with these plans is to take advantage of any matching contributions that your employer offers. This match is a guaranteed return on your investment.

The contribution limit for 2022 is $20,500, or $27,000 if you are age 50 or older. Contributing the maximum allowed to your employer-sponsored retirement plan will enable you to supercharge your retirement savings while saving on taxes.

3. Max out a Roth IRA

How much retirement savings should I have

Photo: Adobe Stock

Opening a Roth IRA is a great way to create flexibility during your retirement years. With the Roth IRA, you contribute to the account using post-tax dollars and the account grows tax-free.

Then, when you take money out of the Roth IRA during retirement, you do not have to pay taxes. After contributing enough to your employer-sponsored retirement plan to receive any match, consider maxing out contributions to a Roth IRA. The contribution limit for 2022 is $6,000, or $7,000 if you are age 50 or older.

Keep in mind that Roth IRAs have an income limitation. Make sure you confirm that you are eligible before contributing.

4. Max out an HSA

How much retirement savings should I have

Photo: Adobe Stock

If you have a high deductible health plan (HDHP), check to see if you are eligible for the Health Savings Account (HSA). HSAs are tax-advantaged, meaning that you can make contributions to the account with pre-tax dollars.

HSAs are triple tax-advantaged if you use the funds for qualified medical expenses. Not only can you make contributions with pre-tax dollars, but also the account grows tax-free and can be withdrawn tax-free for qualified medical expenses.

The contribution limit for individuals in 2022 is $3,650 ($7,300 for families) or $4,650 ($8,300 for families) if you are age 55 or older.

5. Get rid of high-interest debt

How much retirement savings should I have

Photo: Adobe Stock

In most cases, paying off high-interest debt will provide the best return on your money. The average credit card interest rate in 2021 is around 16%. This is by far much greater than the historical 7% average annual stock market return rate.

6. Watch out for lifestyle inflation

How much retirement savings should I have

Photo: Adobe Stock

As your income increases, it is very important to limit lifestyle inflation. Consider creating a zero-sum budget where every single dollar earned is assigned a job, whether that’s going into savings, paying debt, paying bills, or treating yourself here and there.

7. Create multiple streams of income

How much retirement savings should I have

Photo: Adobe Stock

With less time for compound interest to work to your advantage, it is important to save more aggressively towards retirement. If you find yourself behind, consider your options for earning extra money through side hustles.

“How much retirement savings should I have?” isn’t a one size fits all question

How much retirement savings should I have

Photo: Adobe Stock

That’s why deciding to work with qualified advisors like the advisors at Teton Wealth Group can really help prepare you for your retirement. Everyone working toward retirement needs an Ascent Plan. Take Teton Wealth’s retirement mistakes quiz to see where you stand.

Today’s Top Stories

Sponsored

Tax Harassment...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
29 days ago
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
2 months ago
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
2 months ago
Prescription opioids can be disposed of during National Prescription Take Back Day...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
2 months ago
Follow @ikeyospe...
Ike Yospe

Tax Tuesday: The Most Common Mistakes People Make When Filing Their Taxes

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
3 months ago
Follow @ikeyospe...
Ike Yospe

Tax Tuesday: How will last year’s child tax credits affect you?

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
3 months ago

Sponsored Articles

Tax Harassment...
Jordan Wilcox

The best strategies for dealing with IRS tax harassment | You have options!

Learn how to deal with IRS tax harassment. This guide will teach you how to stop IRS phone calls and letters, and how to handle an IRS audit.
spend a day at Bear Lake...
Bear Lake Convention and Visitors Bureau

You’ll love spending the day at Bear Lake | How to spend a day at Bear Lake

Bear Lake is a place that needs to be experienced. Spend a day at Bear Lake.
Curb Appeal...
Price's Guaranteed Doors

How to have the best of both worlds for your house | Home security and curb appeal

Protect your home and improve its curb appeal with the latest security solutions like beautiful garage doors and increased security systems.
Prescription opioids can be disposed of during National Prescription Take Back Day...
Know Your Script

Prescription opioid misuse | How to protect your family from the opioid epidemic

Studies have shown that prescription opioid misuse has increased since COVID-19. So what do you need to know about these opioids?
Follow @ikeyospe...

Tax Tuesday: The Most Common Mistakes People Make When Filing Their Taxes

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
Follow @ikeyospe...

Tax Tuesday: How will last year’s child tax credits affect you?

Fortunately, for most average earners, they will not end up owing overpayments received for the Child Tax Credit in 2021.
How much retirement savings should I have? | 7 retirement tips if you are late to the retirement savings game