The Most Important New Year’s Resolution
The Most Important New Year’s Resolution
The start of a New Year usually inspires people to make resolutions. In fact, Forbes reports that around 44 percent of people say they’re likely or very likely to make a resolution this year. And that number is higher among young adults ages 18 to 34 – around 59 percent of whom plan to make a resolution. And around 19% of adults 55 and older are likely to make a resolution.1
About 30 percent of those folks want to improve their finances in 2024, and 85 percent of them say they think their resolution will have a positive effect beyond just this year.
The Gardner Group has an idea that can both improve your finances and have a positive effect beyond just 2024: increase your retirement savings contributions and develop a formal, written retirement plan.
Fidelity reports that around 55 percent of Americans aren’t prepared to cover basic expenses in retirement – like housing, food, and healthcare. But when they drilled down further into the data, they found it varied depending on generation. For example, Gen Y – or the millennial generation – is not currently on track to cover a majority of retirement expenses, whereas a majority of boomers are. But Fidelity reported that for Gen Y, boosting retirement savings contributions into plans like 401(k)s to 15 percent of their income could significantly increase their chances of being prepared for retirement.2
Plus, the IRS has increased the contribution limits for individuals contributing to their 401(k) plans from $22,500 for 2023 to $23,000 for 2024.3 So the stars seem to be aligning to help you reach this financial resolution, which will likely have a positive effect beyond 2024. And it’s especially critical for millennials to work on a resolution like this.
In addition to boosting retirement savings, focus on having a formal written retirement plan in place as a resolution. LIMRA recently reported that only one in five retirees and non-retired workers have a formal written retirement plan.4 But it’s beneficial to have a written plan in place because it can actually help you boost retirement savings, PlanSponsor reported.5
PlanSponsor found that 52 percent of households with written plans save 10 percent (and sometimes more) of their income, whereas only 36 percent of households without written plans save that much.5
We can help you with both of these financial resolutions and identify what percentage of your income would be best to stash away for retirement. While many people use technology or apps to stay accountable, you have us to help you. Give us a call today and let’s get started!
Sources
1 https://www.forbes.com/health/mind/new-years-resolutions-statistics/
5 https://www.plansponsor.com/written-financial-plan-improves-savings-asset-allocation/