As you piece together a retirement strategy, it can help to judge your current level of progress by examining the average savings by age of those who are in a similar position as yourself. People between the ages of 35 and 44 on average have approximately $20,000 saved according to the 2016 Federal Reserve Survey of Consumer Finances, while those between ages 45 and 54 had roughly $30,000 saved.
Americans had a savings account balance of $41,133 between the ages of 55 and 64 — a good time to start boosting savings with retirement just a few short years away.
There are a few types of accounts that anyone thinking about retirement should be aware of.
If you work for a company, your employer may offer a 401(k) retirement plan that can help you accumulate tax-free wealth as you continue preparing for retirement.
Even if you are self-employed or work part-time, you may still be eligible for a 401(k) retirement account in the form of a solo 401(k). This type of account allows business owners to enjoy similar benefits to an employer based 401(k) without needing to worry about the Employee Retirement Income Security Act (ERISA) of 1974.
Individual Retirement Accounts (or IRAs) on the other hand can be set up by anyone earning an income, even if you already have a 401(k) account established. Many forms of IRAs exist, with the Roth IRA being one of the most popular thanks to its high level of flexibility and penalty-free withdrawals.