Plan ahead: Prioritize retirement savings accordingly
Saving less for retirement than a year ago? If so, you're not alone.
A new survey by Bankrate.com shows that only 20 percent of U.S. households are saving more than last year.
Greg McBride, Bankrate's senior financial analyst, reminds us that lifespans are getting longer, health care is getting more expensive and the burden for retirement savings is increasingly falling on us.
"So people have to prioritize retirement savings accordingly, even if that means tightening the belt on some other things. Doing what you can to take advantage of employer matches on 401(k)s, maxing out tax-advantaged retirement savings options like Roth IRAs, 401(k)s," McBride says.
The maximum limits on those 401(k) contributions went up this year. If you're under 50, you can put away $17,500. For those 50 and up, the limit is $23,000.
But you have to tell your employer if you want to save more.
"So even if you maxed out last year, the amount you can put away this year went up. It's important to take action; make sure you put away enough to reach that new higher limit this year, too," says McBride.