A Federal Reserve survey released in May of 2018 found that 25% of non-retirees reported having no retirement savings or pension whatsoever.

Saving for retirement

Furthermore, less than two-fifths of non-retired adults consider their retirement savings on track. To help you be better prepared for retirement, consider taking the following steps toward retirement literacy:

1. Start early

Time is your biggest asset when saving for retirement. In addition to having longer to save, your compounding interest has longer to accumulate. Compounding interest allows you to earn interest on your principal investment, plus interest on that growing amount.

2. Take advantage of your employer’s match

If you’re enrolled in an employersponsored 401(k), chances are your company matches a portion of your contribution to supplement your retirement savings. Not taking advantage of this employer match leaves money on the table that could make a large difference over time.

3. Diversify

Diversification helps minimize your investment risk by putting your money into different asset classes. For example, if you were to choose an all-stock portfolio, your return on investment would be great during periods of outperformance; but in periods of underperformance, you risk losing a portion of your retirement savings. In turn, a well-diversified portfolio helps to foster long-term stability. Reaching your retirement

According to a study from The American College of Financial Services, an astounding 80% of retirementaged Americans failed a basic quiz on how to make their savings last throughout retirement. Discussing your retirement goals now with your advisor can eliminate financial uncertainty later.

4. Understand your expenses

To estimate how much you need to sustain a secure retirement, you need to first estimate what your expenses will be. Look at recent bank statements and determine how the money you currently spend on food, housing, health care, and other daily necessities may change over time. For example, while your mortgage may be paid off by the time you enter into retirement, your health care costs may no longer be covered by your employer. It’s important to categorize your expenses and how they will adjust throughout your retirement.

5. Gauge how long your money will last

Today’s retirees are living longer than previous generations. In fact, the United States Department of Labor estimates that the average American spends about 20 years in retirement. Make sure your savings can not only cover your expenses during that time, but also cover your discretionary income.

6. Set retirement goals

Everyone’s retirement plan is different. While some people want to become world travelers, others choose to learn a craft or pick up a hobby. Determining what your ideal retirement looks like can help to shape how your savings plan will get you there.

While these ideas can help you get started, it is important to reevaluate your plan every few years, as your priorities and goals can change.

Janney Montgomery Scott LLC, its affiliates, and its employees are not in the business of providing tax, regulatory, accounting, or legal advice. These materials and any taxrelated statements are not intended or written to be used, and cannot be used or relied upon, by any taxpayer for the purpose of avoiding tax penalties. Any such taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

About the author

Michael Repak

Vice President & Senior Estate Planner

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