With the cost of practically everything going up and the future of social security in question, many of us are turning to our 401Ks for our retirement options.
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And, we're saving more.
According to Fidelity Investment, balances are at a ten-year high. In December the average balance rose to $71,500, compared to just over $59,000 back in 2000.
People are also being smarter about their plans. More than a million people took advantage of online tools by Fidelity last year, and nearly half of those people increased contributions to their plans.
More good news—about 8% of companies offering 401K plans through Fidelity reduced or eliminated the employer match at the height of the recession, but since then more than half of them have indicated they plan to reinstate that match within a year.
However, many experts still warn that though we're saving more it's still not enough - not by a long-shot.
The average workers defer from their paychecks around 8%. That falls short of common advice of planning experts who recommend setting aside 10 to 15% of your salary - including an employer match.
According to calculations by Human Resources Consultant Aon Hewitt, baby boomers should have more than 14 times their final salary saved in order to maintain a similar lifestyle in retirement, and that includes 401Ks, social security benefits and any pension or other savings.
Those between 31 and 45 will need about 16 times their final pay, and the youngest workers should save nearly 19 times their final salary.
I say beware of "rules of thumb" that push your nest egg goal to unattainable levels.
Investment advisors want as much of your money to manage as they can - that's how they make money.
But it is far easier to set aside money now than to wait until the last minute.
So I say: save in your Roth IRA where the money is pre-taxed - because God only knows what D.C. will do to our taxes in the future.