This is a great time of year to get on financial track.
Fidelity Investment reports that people are starting to save way too late and not nearly enough.
About 70% of adults have less than $1,000 in their savings accounts.
Tax attorney Rebecca Walser said financial companies are starting to realize people aren’t saving enough money, or when they’re younger.
“By the time you age 30, should have half of your annual salary. In your 20s, you should be saving 25% and not spending more than 75% of your gross earning on actual living expenses,” said Walser. “The reason it’s so important to start so young, is because your money will literally work for you for the rest of your life until you retire. If your older, you have less time horizon left before retirement before the money is actually going to start to be used.”
Try to have the equivalent of your salary saved by age 30 and to have 10 times your final salary in savings if you want to retire by age 67.
In your 20s: Aim to save 25% of your overall gross pay.
In your 30s have the equivalent of your annual salary to twice your annual salary saved.
In your 40s...have three to four times your annual salary saved.
In your 50s...have five to six times your annual salary saved.
In your 60s...have seven to eight times your annual salary saved.
She said retirement funds are also in trouble. It's reported half of US families don't have one. You need to be contributing a minimum of 10%.
Walser said if you are older, the last thing you should be doing is going into retirement with only social security as your plan. If you haven't retired, it's not too late.