People learn from experience. And that certainly includes retirees. Once U.S. adults retire, they quickly learn whether they have enough money to live in the style they expect.
If they don’t have enough money? Being retired, they have enough time to think about what they should have done differently in the decades before retirement to prepare better financially. And they’re willing to share those new, sometimes painful insights with younger people who are still working.
In a new survey for Pentegra Retirement Services, the remedy for not having a large enough nest egg cited most often is to start saving early in your career.
When asked what advice they would give younger workers, 63% of U.S. adult retirees who do not have a traditional pension plan said they would urge young workers to start saving early.
Fifty-seven percent said they would recommend saving more — making larger contributions to retirement accounts like a 401(k) and IRA.
And 51% said they would advise kicking in enough to your 401(k) and similar accounts to get a company matching contribution.
By retirement, many retirees have a better understanding of how Social Security benefits are calculated. So 26% would recommend that younger workers postpone the start of collecting benefits. For each year that you delay the start of benefits between what the Social Security Administration calls full retirement age and age 70, your eventual benefits increase by about 8%.
Full retirement age is 67 for anyone born in 1960 or later.
Another interesting fact that emerged from the survey is that traditional pensions may be getting more and more rare, especially in the private sector. But they have not disappeared altogether.
While 79% of retirees said they receive income from Social Security, 59% said they receive income from a pension plan.
Only 23% said they get income from a 401(k).
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