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Whichever way you get there — through hard work, teamwork, inheritance or Powerball — landing on the cusp of retirement with a seven-figure portfolio puts you in an enviable position.
Compare that to what many people have saved: a median of $185,000 for those aged 55-64, according to Federal Reserve data — a balance that may not be enough to last you.
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The U.S. Department of Labor estimates you’ll need 70% to 90% of your preretirement income to maintain your standard of living. There’s no single way to measure the right target number either, though Citizens Financial Group cites a range of $1 million to $1.5 million to guarantee a comfortable retirement.
The wise strategy is not to sit passively on your hefty nest egg, but to continue growing it. Here are five savings strategies you can consider to help you get there.
Leverage tax-deferred growth
The IRS has no age limit on how long you can continue IRA contributions, and your money will continue to grow tax-free as you save. But there are still contribution and deduction limits to be aware of.
If you’re covered by a retirement account at work, traditional IRA deductions are phased out for married couples if your modified adjusted gross income (MAGI) is between $123,000 and $143,000. With a Roth IRA, that phase-out happens between $230,000 and $240,000. For single filers, the upper limits are $87,000 and $161,000 respectively. Fortunately, the IRA contribution limit in 2024 is $8,000 if you're 50 or older, up more than 14% from 2022.
Move to a less expensive part of the country
From 2015 to 2019, only 5.9% of people aged 65 to 74 chose to relocate, according to U.S. Department of Commerce data. But definite financial advantages lie in moving from a high-cost-of-living locale to a much less expensive one.
As of the first quarter of 2024, the Council for Community and Economic Research found that the Cost of Living Index in San Francisco (the nation's fourth-most expensive city) is 169.6 — more than double that of at least 10 of the least expensive areas, including Amarillo, Texas (83.1). If you want to stay closer to your hometown, a cost-cutting move is also entirely possible. RentCafe estimates that the cost of living in Rockford, Illinois is 24% lower than in Chicago — only 90 miles apart.