Retirement should be a time of rest, relaxation, and enjoyment. It shouldn’t be a time to worry about your finances. If you’re looking for the former, proper and proactive retirement planning from a young age is key.
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There’s one generation in particular that’s closest to retiring: the baby boomers. USA Today explained that in 2024, the baby boomers are celebrating birthdays between the ages of 60 and 78. This means that baby boomers were born between 1946 and 1964.
According to the Alliance for Lifetime Income (ALI), 2024 marks the beginning of the “Peak 65 Zone,” otherwise known as the largest surge of retirement-age Americans turning 65 in U.S. history. Over 4.1 million Americans will turn 65 each year through 2027, which is more than 11,200 every day.
However, while millions of boomers are retiring this year, many may not be financially prepared for retirement. As highlighted by The 2024 Peak Boomers Impact Study, 52.5% of peak boomers have assets of $250,000 or less and will rely primarily on Social Security as a source of income in retirement. What’s more? Only 14.6% of peak boomers have assets of $500,000 or less and most will struggle to meet their financial needs.
That being said, the minority group of baby boomers is on track to retire quite comfortably. If you’ve saved considerably more, kudos to you.
Learn More: I’m a Baby Boomer Who Had To Un-Retire — 3 Money Lessons I Wish I’d Known
5 Signs That Boomers Are Ready For Retirement
If you’re a boomer and you’ve made these five financial moves, you probably have enough savings to last in retirement, according to SmartAsset:
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You maximized your retirement plans: Maximizing your retirement accounts as early and often as possible in your career is vital to your long-term financial stability. Whether it’s your employer-sponsored 401(k) with a match or your Roth IRA, ensuring that you contribute the maximum each year will equate to more savings when you enter your golden years. For 2024, the 401(k) contribution limit is $23,000 and the Roth IRA contribution limit is $7,000.
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You made catch-up contributions over age 50: Retirement account catch-up contributions pad your retirement savings beyond the annual IRS limit and allow for further compounding. For 2024, the 401(k) catch-up contribution limit is an additional $7,500 and the Roth IRA catch-up contribution limit is an additional $1,000.
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You used a health savings account (HSA): Health savings accounts allow for tax-deferred growth on your money. When coupled with a high-deductible insurance plan, your withdrawals are tax-free and can be used to pay for qualified medical expenses and the cost of Medicare premiums.
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You used a brokerage account: Investing your money in assets like stocks, ETFs, and mutual funds via a brokerage account is a smart way to grow your wealth. Investing early and often will unlock a financially secure retirement for years to come.
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You purchased an annuity: An annuity is another option for retirement income that encompasses fixed income and stock market assets and provides tax-deferred growth on your investments. As you enter retirement, you can withdraw income as needed or annuitize your balance for guaranteed income like a pension. You’ll receive the principal tax-free and you’ll just have to pay taxes on the earned interest.
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This article originally appeared on GOBankingRates.com: 5 Signs Boomers Have Enough Savings To Last In Retirement
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