I recently saw a stat about boomers retirement funds that shocked me. So today, let's talk about where boomers are, where you are, and what I would do if I was nearing retirement and needing to get back on track. And at the end, I'll speak directly to the younger generations about what this all means for us. So be sure to like, subscribe, and share this episode with a friend. So according to investment data, at the end of 2024, boomers had an average of a 401k balance of $249,300. Now, this does not take into account if boomers had something else like a Roth IRA, for instance, because the average balance for their age group in that is around $257,000. Now, if they have one or the other, that's less than what I'd be comfortable with when it comes to retiring. So if you have both accounts and that total near the average balance would be around kind of, I don't know, half a million dollars, right, if we're doing rough math. And so when you look at that, you have to be able to say, okay, is that enough to retire on? And so it's going to depend on, obviously, lifestyle, where you live, where you are financially. Do you have a paid off house? Do you not? How much debt do you have? All of it. But what about those of us who are not boomers? So if you are Gen X or a millennial, then here's where you might fall. Gen Xers have an average 401k balance of about $192,300 and an average IRA balance of $103,952. Millennials have around in their 401k and about in their Roth IRA So if I was approaching retirement because knowing what we know now with all the averages, there are a couple of things that I probably would be doing. But first, here's a refresh of a few good rules of thumb when it comes to retirement investing. So you want to be debt-free and have a fully funded emergency fund first. Then you want to invest 15% of your income into retirement. So that 15% can be divided up in a couple of ways. Really, the two big places that are great from a tax perspective are your 401k at work, or if you have a Roth 401k, that's even better, or a Roth IRA. So what I would do is go up to the match if your company matches. So say they match 5% for easy math. So go up to the 5%. That means you have 10% of your income left to invest. So I would go over to the Roth IRA. I would invest as much as you can. And if you hit that 10% without maxing it out, that's okay. Just put as much as you can in that Roth IRA. Now, if you hit the max, which I think is around $7,000 a share, and you still have percentages left to invest, then you can go back to your 401k and put some more money in. Now, looking at, this can be kind of confusing, but I think looking at your numbers and your progress is really big. So if you want to check out the investment calculator, I'll put a link down below. because it is fun just to put in some numbers to be like, okay, if I invested this much every month from age 35 to 65, how much money would I have? So you can kind of play around with it and see. But usually that 15% is a really great percentage to invest because for a lot of people, it's more than what they would normally invest. Now, one thing every generation can benefit from is Christian Healthcare Ministries. So if you're looking for a more budget-friendly way to handle medical costs and stay true to your values Christian Healthcare Ministries is a great option to think about CHM isn insurance It a biblical community way for Christians to share each other's medical bills. And so that means no network restrictions, no enrollment deadlines, and more flexibility, which is huge if you're self-employed or between jobs. Families often save hundreds of dollars a month, and that kind of margin gives you breathing room while you're working the baby steps. So learn more at chministries.org slash budget. All right, so if I were in my 60s and had less than sufficient retirement funds, here are three things that I would do. I would go ahead and just pay off as much debt as possible. I really would make that my main focus because if you are approaching retirement age, compound interest is wonderful, but you're not gonna get the advantage of that as you would have obviously if you were like in your 20s or your 30s. So presently, what is the biggest risk? And that is having debt. So getting that out. Number two, you're probably gonna have to accept that you're gonna work longer than you'd want to. So a lot of people are like, okay, retirement age, 59 and a half, once I can dip into my 401k. But really, retirement, it's not an age. It's not like, oh, I'm at this age, now I get to retire. It is a number. And so if you are behind, there is kind of that reality of like, okay, I'm probably gonna be working longer than maybe I want to. And number three, when you get to the point that you are actually investing, you can do catch-up contributions, which is great. So once you've hit 50 years old, you can invest an additional $8,000 in your 401k per year, which would total $32,500. And then you can also do super catch-up contributions between the ages of 60 and 63 that would total $35,750 a year. Now for IRAs that an additional And so that total will be that you can put into your IRA So if you are in a position again where you have no debt and you're able to put some more money to retirement, yes, the more the better, right? So just because you're older and being like, well, I guess my time's up. I can't do anything. No, you can. Absolutely, you can. So be putting and be aggressive when it comes to that savings. Now, if you're a millennial, Gen X, or even Gen Z, some couple things to keep in mind. Number one, use the boomer's financial situation as an example, right? Time flies. Retirement is going to come. And so you can even ask yourself like, okay, what if I started now? What if I was more aggressive where I am now? And that's probably what a lot of boomers wish they had done. And to think about what can I improve on? Because man, time does go fast. And I think enjoying your life, absolutely. I want you to be able to have a fun life and enjoy it. But I also want you taken care of in your latter years, because I do think that's really important. And number two is to start as early as possible. You know, we mentioned compound interest, but for a lot of people, their retirement accounts, like 80, sometimes even 90% of what they have when they retire is growth. It's not even what they put in. So majority of what you're going to retire on is the growth that you're going to make in these early years. So the earlier you start, the better off you're going to be. Now, once again, you've got to be out of debt, have a fully funded emergency fund and all of it, but then go and start investing. But there's more to know about retirement depending on your age. So be sure to check out my episode, Crucial Retirement Decisions You Need to Make by Age. You can click right here and watch, or if you're listening on podcasts, I'll leave a link below. All right, you guys, remember to take control of your money and create a life you love.
