Here's What an Extra $6,500 a Year Could Do for Your Retirement Savings
There's a reason we're told to save for retirement consistently throughout our careers. Social Security will only replace about 40% of the average worker's pre-retirement wages, and most seniors need more like 70% to 80% of their former earnings to live a comfortable lifestyle. That extra money needs to come from somewhere, and in the absence of a pension or inheritance, your best bet is probably your 401(k) or IRA.
If you're under 50 years of age, your annual 401(k) contributions are limited to $19,500. Now that's pretty generous in its own right. But if you're 50 or older, you're also entitled to a $6,500 annual catch-up contribution, and that gives you a real opportunity to grow some serious wealth for your senior years.
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Source Fool.com
