Americans saving for retirement are riddled with worry about having enough to support themselves in their golden years. Experts often suggest that retirees should have massive nest eggs north of $1 million. But that’s unattainable for many people, which leaves them paralyzed with fears about the future.
A recent survey by global investment manager Schroders found that Americans who participate in their company’s retirement plan think $1.3 million is the magic number to have saved for retirement.
“It’s easy to feel discouraged when you see big numbers thrown around as the benchmark for a ‘comfortable’ retirement, especially when balancing everyday expenses can already feel overwhelming,” said Kim Kennedy, financial consultant at Alliant Retirement and Investment Services.
But the reality is that most Americans don’t think their retirement savings will hit seven figures. Indeed, the average baby-boomer has $249,300 in a 401 (k) and $257,002 in an IRA, according to Fidelity.
Here are a few expert tips on how to drown out the noise and save for the retirement you want.
No Approach is One-Size-Fits-All
Kennedy said regardless of what retirement experts and financial institutions suggest you should save for your future, no single approach works for everyone.
“The key is to start with what’s manageable, build consistency, and focus on progress rather than perfection,” she said.
Instead of aiming for a specific number, some financial institutions suggest using other savings benchmarks. That could mean saving a certain percentage of your annual salary by a certain age, then increasing that as your salary increases.
For example, instead of aiming to have $1.3 million saved by the time you turn 65, aim to have 10 times your annual salary saved.
That exact number might not work for everyone, but having a benchmark that can be molded to your needs will make saving much more attainable, and less stressful.
“Break down your goals into manageable steps. Rather than focusing on a large total sum, set smaller milestones that feel achievable and are easy to envision today,” said Kourtney Gibson, CEO of Retirement Solutions at TIAA.
Focus On What You Can Control
There are a lot of financial things we can’t control: How the stock market performs, inflation levels, and where interest rates stand, to name a few.
Because we can’t control how these things change and impact us, it’s important to instead focus our energy on things that we do have a say in: “setting realistic goals, making steady progress, and adjusting as life changes,” said Kennedy.
Manageable plans for the future, not just retirement, can help ease the stress of economic uncertainty.
Take Advantage of Resources Available to You
Saving for retirement can feel overwhelming if you’re starting from scratch or doing it alone. Luckily, there are resources that can help manage the worry, including some that might be offered by your employer.
If your company offers a retirement plan, opting in and contributing at least enough to receive their match is a great way to get what is effectively free money for you in the future.
“Many employers also offer comprehensive resources to support both financial and mental wellness, including financial planning services, employee assistance programs and retirement planning tools,” said Gibson.
If your employer doesn’t offer resources, you may also be able to find financial literacy resources at your local community center or library.
Consider Guaranteed Income Solutions
If you want some secure income that will be guaranteed for you in retirement, Gibson said annuities might be a something to opt for.
“[They] can help you save during working years and provide peace of mind by ensuring you’ll have guaranteed income that you can’t outlive when you’re ready to retire, even if your total savings aren’t at the ‘recommended’ level,” said Gibson.
Annuities are a contract that is issued by an insurance company and bought by individuals. The insurance company pays out a fixed or variable income stream to the purchaser in exchange for premiums they’ve paid. They are guaranteed for life, and many retirees choose them for the security they provide.
“When you know you’ll have reliable income for life—regardless of market fluctuations or how long you live—it creates a foundation of security that can significantly reduce financial stress,” said Gibson.
Tune Out The Noise
It may feel like everywhere you turn, someone is giving different advice on how much you should have saved by when, and how you should be doing it. Money is stressful, and the feeling that you’re not doing enough when you’re doing everything in your power can leave you feeling defeated.
Kennedy stresses the importance of drowning out the noise that isn’t productive and remembering that any financial planning you’re doing is benefiting future you.
“Financial planning should support your peace of mind, not erode it,” she said.
Gibson says savers should also remember that financial security isn’t just about having a certain number of assets at your disposal.
“It’s about creating stability and peace of mind for your future,” she said.
