Less Than Half of Workers Think They’ll Meet Their Retirement Savings Goals. Do These Things if You Have to Catch Up

It’s not unusual to come up with a magic savings number in the course of your retirement planning — a number you think will lend to long-term financial security and the ability to enjoy your senior years to the fullest.

Maybe that number is $1 million. Maybe it’s $2 million. There’s no such thing as the “right” savings number, because everyone’s needs are different. And if you determine that you need a $2 million nest egg to live comfortably once you stop working, so be it.

But in a recent Schwab survey, only 47% of savers said they’re likely to meet their nest egg-related goals. That means most workers aren’t confident in their ability to retire the way they want to. If you feel similarly, then here are some moves worth making immediately.

1. Reassess your investing strategy

Maybe your portfolio has an equal mix of stocks and bonds. If you’re within a few years of retirement, that’s not a bad balance. But if you’re in your 40s and half of your IRA or 401(k) plan is in bonds, it may be time for a change.

Maxing out your retirement plan year after year may not be enough to help you meet your savings goals. It’s important to invest in an aggressive enough fashion to grow your money at a decent pace. And that generally means going heavy on stocks when retirement is decades away.

2. Make sure you’re not losing money to fees

The great thing about 401(k) plans is that they’re easy to fund and they often come with employer matching dollars. The bad thing is that they’re notorious for charging costly fees.

Now you may not be able to do much about the administrative fees associated with your plan. But you can control the fees you’re charged based on the investments you’ve picked.

If those fees are high, consider dumping some actively managed mutual funds and moving over to index funds. The fees (called expense ratios) there can be quite reasonable, and you won’t necessarily sacrifice growth for that savings. Quite the contrary — index funds commonly outperform their actively managed counterparts despite their hands-off strategy.

3. Consider working longer

If you’re nearing the tail end of your career and you aren’t happy with your IRA or 401(k) balance, putting in a few extra years could have a huge impact. Americans are living longer these days, so working into your late 60s or early 70s won’t necessarily mean cutting your retirement unreasonably short.

Also, jobs have gotten more flexible in the wake of the pandemic. If you’re able to work remotely at least part of the time, you may find that you don’t mind extending your career and getting an opportunity to pad your nest egg.

It’s important to be confident in the amount of savings you’re bringing with you into retirement. If that’s not the case, make sure you’re invested appropriately for your age, work on minimizing investment fees, and consider putting in a few more years on the job to give your nest egg a notable boost.

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