A new report by the U.S. Census Bureau shows: Shrinking median income For U.S. households: $74,580 in 2022, a little over 2% less than last year’s forecast.
But a recent Bankrate survey found that Americans want about three times that much financially.
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of According to research Even though the average annual salary for full-time workers is just over $75,000, the average American feels they need to earn about $233,000 per year to be financially stable.
Nearly half (41%) of respondents also cited a lack of retirement benefits as a reason for their financial insecurity.This matches Northwestern Mutual’s numbers for 2023. study The report found that Americans cite $1.27 million as the magic number to retire comfortably, even though the average savings is only $89,300.
Reconciling ambitious money goals with your bottom line numbers is no easy task. Even if you don’t earn as much as you think you should, there are three things you can do now to build the nest egg you need to protect your future.
1. Eliminate high-interest debt
From money gurus like Dave Ramsey and Suze Orman to your friendly neighborhood financial advisorWe find that everyone agrees that high-interest, unsecured debt robs us of wealth.
What’s more, one in four (26%) Bankrate survey respondents cited “high or revolving debt” as a reason for their lack of financial security.
total Americans credit card debt Today, that number exceeds $1 trillion, making retirement even further away for many people.
With average APRs rising over 20%, there’s everything you can do. pay off that debt faster As your retirement date approaches, you’ll have peace of mind.
2. Maximize your 401(k) contributions
It seems foolish for Americans to do such a thing, but ignore free moneythat’s exactly what happens if you can’t take advantage of employer contribution matching to grow your retirement account, or if you enroll but don’t reach the maximum amount available.
a recent researchFinancial services platform Magnify Money found that 1 in 10 working Americans miss out on a perfect employer match. Meanwhile, 7% say they don’t know if their employer offers a plan in the first place.
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Budgets may be tight right now, but every penny you can invest in your budget 401(k) Now that you’re backed by an employer match, it’s an easy way to ease your worries about your financial future.
If you can’t afford to go that far yet, talk to your employer about the automatic escalation options available to you. Doing so will ensure you are utilizing all available funds by automatically increasing your annual contribution level until you reach your goal.
3. Choose a cheap location
Suffice to say $233,000 New York City won’t go that far. Like somewhere in the Great Plains. You might not want to trade the Big Apple for a big country in the sky, but it might be worth considering the move, especially if you have the flexibility to work remotely.
Research by Kiplinger It turns out you don’t necessarily have to move to a smaller town to find cheaper options. For example, the cost of living in St. Louis is 13.7% lower than the U.S. average, and in Topeka, Kansas, it is 17.5% lower than average.
As home prices and rents remain high across the country, you can find cheaper housing in places like Kansas’ capital and Minneapolis, Minnesota. The big cities of the Midwest are First major U.S. city to curb inflation.
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This article is for information only and should not be construed as advice. PROVIDED WITHOUT WARRANTY OF ANY KIND.
