A great opportunity to play catch-up
It’s never too late to make up for lost time when it comes to saving for retirement. Even if you have not focused on setting money aside, there is always time to get your retirement savings in play again.
You can contribute up to $23,500 pretax to your employer-sponsored retirement plan in 2025. And, if your plan includes a “catch-up provision” and you are age 50 or older, you can contribute an additional $7,500 in what are called “catch-up” contributions to your retirement plan in 2025.
And, if you are between ages 60 and 63, thanks to recent legislation—and if your plan permits it—you can make, what’s known as, a “super catch-up contribution” of up to $11,250 to your retirement plan in 2025. That’s a huge incentive to really add to the money that will support you in your retirement years.
Moreover, if you don’t already know, the money you contribute pretax to your retirement plan is placed in your plan account before income taxes are withheld. Making pretax contributions can lower your current income tax bill. Earnings on your plan investments are also tax deferred. That means that your savings can potentially grow faster than they would in an investment that generates taxable income each year.
How confident are you about your retirement security?
You are not alone if you do not feel very confident that you will be able to enjoy a secure retirement. Many people feel the same way. For some, their wages have not kept pace with inflation, which often means that there is little extra money available for adding to their retirement savings. For others, the expenses of child rearing or the costs associated with unforeseen emergencies will often force them to cut back on what they contribute to their retirement savings.
Whatever your circumstances, the reality is that there are things you can do now to boost your chances of reaching a financially secure retirement. Focus on the following core steps:
- Start with an honest assessment of where you are now. Ask yourself if the amount you currently contribute to your employer-provided plan is enough to get you to a financially secure retirement. Your plan website may provide a calculator that you can use to estimate if you are on track or falling behind on that goal.
- If you find that you are behind on your retirement savings goal, figure out where and how you can find some extra money to boost your contribution rate. You may need to reevaluate your spending and look into a sideline gig to find the extra money for your retirement savings.
- Do not stop contributing to your plan. All things being equal, consistent and regular contributions to your retirement plan increase your chances of attaining a financially secure retirement.
- Invest your contributions in a diversified selection of asset classes, such as stocks, bonds, and cash equivalent mutual funds, or in a target-date fund.
Talk to a financial professional for additional insights and practical steps you can take to boost your retirement confidence level.
American workers' confidence in retirement
31%
31%
of workers who cite inflation as the reason for their lack of confidence.
32%
32%
of workers who do not feel confident that they will have enough money to live comfortably in retirement.
35%
35%
of workers who expect Social Security to be a major source of income in retirement.
39%
39%
of workers who say that their lack of savings is the reason they lack confidence in the future.
68%
68%
of workers who are confident that they will have enough money to live comfortably throughout retirement.