When it comes to retirement savings, when you start to save may have a bigger impact on your bottom line than you think. A study conducted by Wells Fargo (NYSE:WFC) revealed some very surprising information about people right on the brink of packing it in.
During an interview on the FOX Business Network’s Mornings with Maria, Wells Fargo Retirement and Trust head Joe Ready said: “55 to 59 year olds we found had saved over $200,000 median amount for retirement savings versus those 60 plus [who] only saved $50,000. So there was a big retirement gap for people right on the doorstep of retirement.”
Ready said saving over time played a major role in the outcome of the survey.
“The 55 to 59 year olds started saving at 31. Those that were 60 plus started saving 6 years later at 37… So you can see the power of compounded savings over time – [those] 6 years makes a big difference in the savings account.”
Ready explained how you can “step up your savings” if you’re over 60.
“It’s really step back and then if you need to save more, do a financial inventory and then step up your savings. There’s lots of ways to do that. You’re hopefully at a higher income earning level, so you can say get full advantage of your 401(k), up to the limit and the match -- exercise your catch-up contribution, which is over another $6,000,” he said.
He also explained how to manage your 401(k) if you’re near retirement.
“If you’re on a good path and you’ve saved enough money, with today’s volatility and timing of distributions and sequence of returns, it’s really important to manage risk. So they may want to sit down with a financial advisor, incorporate their other assets and have a more holistic view and manage risk and optimize their outcome.”