What 55-64 Year Olds' Savings Tell Us About Their Retirement Preparedness Today

Where Else People Age 55-64 Are Saving Money Asset % Households with Asset Median Value for Asset Holders Savings Bonds 8.5% $3,000 CDs 6.6% $25,000 Stocks (directly held) 19.2% $30,000 Retirement Accts 57% $185,000 Bonds (directly held) 1.2% $400,000 Source: The Federal Reserve’s “Survey of Consumer Finances” (2022) See how your savings stack up against typical Americans your age—and discover smart strategies for strengthening your retirement readiness.FreshSplash / Getty Images Source: The Federal Reserve’s“Survey of Consumer Finances”(2022), median transaction account balances by age group. Transaction accounts include checking, savings, money market, and brokerage cash accounts, as well as prepaid debit cards. "Directly held" means the asset is not in a retirement account. The value of bonds in this table looks much higher than the other categories, especially given that only a tiny fraction of 55-64-year-olds owns directly held corporate or municipal bonds. This small group either holds numerous bonds, bonds with high values, or both. Also, survey respondents self-report values, and could have reported face values of bonds that they found on account statements, rather than market values, which may have been lower in 2022. Strategies to Maximize Your Retirement Savings in Your 50s and 60s There’s no right/perfect/ideal amount to save. It varies based on your personal and financial situation. Your lifestyle and costs can vary region to region, and if you have pensions or additional sources of retirement income beyond Social Security, that can mean you can have less in retirement savings, said Marguerita Cheng, CFP, founder of Blue Ocean Global Wealth . If you were raising children and helping them with large expenses such as college, you may not have been able to save as much when you were younger. Or if you had car payments or credit card debt that you’ve been able to pay off, you may now be able to direct more money toward savings. Cheng offers these tips: Learn More About Social Security If you are not already collecting Social Security payments, Cheng recommends creating an account at SSA.gov to see what you can expect to receive at age 62, at your full retirement age (as determined by the Social Security Administration), and at age 70. You will receive the most if you wait until age 70, but you can start collecting the benefit at age 62. You may receive less at that age, “but there's times and situations where that may be appropriate,” Cheng said. Remember That You’re a Long-Term Investor If you have extra money from paying off debt, allocate some of the cash flow to both short-term savings and long-term investments. “Even if you're in your 60s and you're retiring today, you're still a long-term investor,” Cheng said. “It’s not unusual to spend 30 years in retirement.” Use Methods Beyond 529s to Pay for College If you are balancing college costs and retirement and you have a 529 education account, Cheng recommends not paying for school solely with those funds. While they are very favorable and utilize tax-free money, she...

Preview: ~500 words