So now let's talk about folks in their 50s and 60s. If you want to know where the average is, the average 401K balance for someone in their 50s and 60s is about $179,000. That's not enough. Remember, we were doubling every decade, but we did not double this decade. I'm going to argue that you have to change some things to get that figured out. Now, I am encouraged by Brian's savings rate increase to touch 15.7%, but if you're at that dollar figure and you haven't planned for retirement, I don't know that 15.7% is going to get you there.
According to a Fidelity study, by the time you get to 60, you ought to have 8.1 times your income saved. Again, unless you have a pension, really healthy Social Security, or a lower standard of living, I don't know if 8.1 is going to be the number that's going to get you there. I think you need to know your number so you know exactly what it is. If you're watching this and you're in your 50s and 60s and still in the workforce, you have a superpower in the fact that you can keep powering through no matter what's going on in the economy, no matter if we're in a recession, no matter what geopolitical stuff is going on, you still have a job. I would encourage you, while you're still in the workforce and you have the ability to start earning income and even doing side hustles or figuring out other ways to increase, focus on the contributions.
Let's get those savings rates as high as possible because just like when you hit a steep hill, what do you try to do? You try to hit the accelerator so you get some momentum so you hit it as fast as you can. If you're behind on your savings and investments, get serious now because I do have that glass half-full optimism where I think that you can figure out if there are other levers like working part-time in retirement. But right now, while you're in the workforce, go and prioritize your future because maybe you had too much fun when you were younger. This is the time now that you're going to have to pay the price, get serious and get disciplined so that you can actually have the retirement that allows you still to have some enjoyment because I am the optimist that thinks that everyone can create financial independence. But you're going to need to prioritize your future because it's important. Now, if you work at an employer that has a 401K, don't miss the opportunity. Make sure you understand what benefits are available to you because it can be a huge tool in your financial tool belt. Don't waste it. Don't let social media be a bad influence on you. There are so many people out there that are throwing cold water on the 401K. I still think there is a reason when you look at the research and the statistics. This will more than likely be the first account that has the potential to cross seven figures in your journey towards wealth and financial independence. Don't overlook it. It has free contributions from your employer, it grows tax-deferred or tax-free for many decades, and it also encourages great behavior from you because you can't touch it until you reach a certain age. That sheer fact allows you to always be buying no matter what's going on in the world. Not wasting any calories or horsepower on that, but all those things will accelerate your success. Take advantage of the 401K.
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