👴 Rising costs and retirement

and how to protect your future

In partnership with

Retirement Download

Strategies for a successful retirement

Rising Costs and Retirement: How to Safeguard Your Future

While inflation in the U.S. has been declining from its peak in June 2022, the rising cost of living remains a significant concern for Americans when it comes to retirement.

According to an October survey by Allianz Life, more than 40% of respondents identified "everyday costs increasing" as the greatest threat to their ability to live comfortably in retirement. The survey, which polled 1,000 individuals over the age of 25 earning more than $25,000, also highlighted other major concerns for retirement savings.

Top Concerns About Retirement Savings

The Allianz Life survey revealed the top three factors Americans believe pose the greatest risks to their retirement security:

  1. Everyday costs increasing (42%)

  2. Outliving money (35%)

  3. Health-care costs (32%)

It’s clear that people are anxious and a major reason behind this anxiety is a lack of savings.

According to this survey, about 21% of retirees have no retirement savings. Moreover, 36% of retirees have less than $50,000 in their retirement accounts. Furthermore, more than 50% feel that the amount they have is not enough for retirement.

This lack of sufficient retirement savings amplifies concerns about outliving savings or having rising costs drain their retirement funds.

Steps to Prepare for Retirement

If you’re worried about not having enough saved to sustain your retirement, there are steps you can take to bolster your financial future.

1. Maximize Employer Matching Contributions

One key area to focus on is employer-sponsored retirement savings plans, such as 401(k)s or 403(b)s.

The 403(b) and 401(k) plans are both employer-sponsored retirement savings options that offer tax advantages. The primary distinction between the two lies in their eligibility: the 403(b) is designed exclusively for employees of government and non-profit organizations, while the 401(k) is available to employees working in the private sector.

Here’s a video that focuses on the differences between the two:

The situation isn’t looking great, as per this Vanguard survey. Research found that around 46% of workers either contribute less than their employer’s match or don’t participate at all. If your employer offers matching contributions, not contributing enough to receive the full match means you’re leaving free money on the table.

You don’t need to make a large contribution right away. Instead, consider gradually increasing your retirement contributions by 1% each year until you reach your target savings rate.

Fidelity recommends a savings rate of 15%, which includes both your contributions and any employer match. Be mindful of the contribution limits for retirement accounts—individuals can contribute up to $23,500 in 2025 to a 401(k) or similar retirement accounts.

2. Delay Claiming Social Security Benefits

Another important strategy is delaying the start of Social Security benefits. Although you can begin claiming Social Security at age 62, waiting longer can result in significantly larger monthly payments. For every year you delay your claim between your full retirement age and age 70, your benefit increases by 8%.

Delaying Social Security can be a valuable strategy to secure a larger, inflation-adjusted income in retirement. According to Anne Lester, a retirement expert, "Just waiting a few years gives you a huge boost to your guaranteed inflation-adjusted income in retirement." This delay can be an effective way to stretch your retirement savings and ensure a more comfortable future. But, delaying can have some side effects as well. So, choose smartly.

Conclusion

Inflation and rising costs are real concerns that can erode your retirement savings, but there are steps you can take to improve your financial outlook. By taking advantage of employer retirement matches and delaying Social Security benefits, you can build a more secure financial foundation for your post-work years. For a more personalized strategy, it can also be helpful to consult with a financial advisor who can help tailor a retirement plan to your specific needs and goals.

Sponsors:

The NEXT Trillion Dollar Company?

This company just signed a MASSIVE deal with Apple.

It gets their AI tech in Apple’s iPhones and iMacs until 2040!

But it goes beyond that.

The company is getting its tech into products by Nvidia, Google, and Samsung too.

Its AI tech is so crucial…

Nvidia is actually buying up the stock too.

They’ve invested more in this one company than any other… nearly $150 million.

Is this stock the next Nvidia… which has gone up 81,700% over the last 20 years?

Smart Money, Smart Machines

Dubbed "the rocket fuel of AI" by Wired, this innovation is causing a stir on Wall Street. With projections hitting $80 trillion – that's 41 Amazons – the potential is huge. But here's the deal: sharp investors who are ahead of the game have the opportunity to invest in a technology poised for domination. Thanks to The Motley Fool, you can access the full story in this exclusive report.

Resources

How was today's newsletter?

Login or Subscribe to participate in polls.

👩🏽‍⚖️ Legal Stuff
Nothing in this newsletter is financial advice. Always do your own research and think for yourself.