Suze Orman says it’s good to evaluation office retirement plans NOW
SUZE Orman has warned Americans to review their workplace retirement plans now – or face poverty in their older years.
The financial expert urged her followers on Twitter to double-check how much they are putting into their plans – as they may not be saving enough to comfortably retire.
Suze Orman has warned Americans to review their retirement plans in the workplaceCredit: NBCU Photo Bank / NBCUniversal via
Depending on where you work, your company may have an employee retirement plan.
These plans are designed to help you save up for your retirement – and in some cases your employer will pay a contribution too.
The amount that you can get from your employer varies from company to company, but it does mean that you can increase your savings for the future.
If you have started a new job in the past few years, you have likely been automatically enrolled in your workplace pension plan.
But if you didn’t specify how much you want to deposit each month, you would have received a standard rate.
Suze said that failure rate is usually set at 4% or even less – which she added is too low to be retired.
She said, “If you’ve been automatically enrolled, the failure rate is usually way too low. Many plans start at 4% or less.
“At least you want to save at least 10% of your salary.”
Suze said it was important to save as much as you can for your later years as you could expect big bills.
She previously said that a 65-year-old couple retiring today would need a whopping $ 300,000 to fund their medical care out of their own pocket for years to come.
What is a company pension?
Employers often have company pension plans – but what yours will look like depends on who your employer is and what they offer.
Many jobs offer 401 (k) plans and some may offer traditional retirement plans.
A 401 (k) plan allows you to allocate a percentage of your pre-tax salary to a retirement account, and this is sometimes matched by your employer.
While a traditional retirement plan means that you put money into a plan – which is sometimes customized by your employer – and then the money is put into place by a professional investor.
However, 401 (k) plans are much more common today than a traditional retirement plan.
Most employees can currently deposit $ 19,500 per year into a 401,000 account with no employer contributions.
However, workers over the age of 50 are entitled to an additional catch-up contribution of $ 6,500 in 2020 and 2021.
The current limit on total employer and employee contributions is $ 57,000 or 100% of employee compensation (maximum of $ 285,000), whichever is lower.
For workers aged 50 and over, the base limit is $ 63,500.
How do I join and how do I increase my contribution?
You will likely be automatically included in your company’s pension plan when you start your new job.
But as Suze says, if you don’t indicate how much you want to contribute, you may not be putting aside enough.
If you want to save more money and want to check if you are on a program, contact your Human Resources department.
You should also check your payroll to see how much you are putting away.
There are a number of different retirement plans – visit the Department of Labor’s website for more information.
Suze Orman also recently revealed how to get a free $ 100 cash bonus by saving money for 12 months.
She has also urged parents with her five top tips not to “waste” child tax credits of up to $ 300.
We round up eight ways to make free money including reward websites and 401k boosts.