After years of hard work, many Americans just want to kick back, relax and enjoy their golden years. In theory, this may seem simple, but in reality, they may not be financially ready.
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Those who have done the math estimate that they will need about $1 million for retirement. But workers near the retirement age only have $163,000 on average saved, according to a study conducted by the Economic Policy Institute. The same study found the average savings of the top 1% of Americans was $1,080,000.
However, bridging the gap may not be as hard as it seems, according to financial expert Chris Hogan, who says increasing your knowledge is the first step to growing your retirement savings.
“Getting started is your first obstacle,” Hogan said on FOX Business’ “Mornings with Maria.” “Money will grow, we just have to give it an opportunity.”
There are several options for you to save for retirement, but the easiest way to see it grow is by taking advantage of 401(k) or 403(b) plans offered by employers.
“Set it up to where it’s happening automatically – there’s nothing you really need to think about,” Hogan said. “Just don’t touch it, leave it alone and watch what happens and you’ll look up in 10, 12, 15 years and you’ll see it growing exponentially.”
Hogan said people also need to understand what they are investing in and the anticipated return.
“There’s a lot of money sitting on the sidelines right now – sitting in a savings account or a money market account,” he said. “People need to understand that money is simply not going to grow.”