Retirement Savings Champions: Massachusetts Takes the Lead
When it comes to retirement savings, one state stands out from the rest: Massachusetts. With an average household retirement savings balance of $448,500, Massachusetts residents are leading the pack. This impressive figure is based on an October study by DepositAccounts, which analyzed data from the U.S. Census Bureau’s 2022 Survey of Income and Program Participation.
A Recipe for Success
So, what sets Massachusetts apart? For starters, the state boasts the highest average salaries in the country, with workers earning a whopping $80,330 per year, according to Empower. Additionally, Massachusetts has taken proactive steps to support retirement savings, particularly for small nonprofit organizations and their employees. The state’s CORE program, launched in 2017, has already enrolled over 200 organizations, providing a vital platform for workers to grow their retirement nest eggs.
State-by-State Breakdown
While Massachusetts shines bright, other states struggle to keep pace. Louisiana and Mississippi have the lowest average household retirement savings, with balances of $128,900 and $131,500, respectively. Even popular retirement destinations like Florida rank relatively low, with average savings of $287,200. It’s essential to remember that averages can be misleading, as a few high or low account balances can skew the results.
Beyond the Numbers
Reaching your retirement savings goal requires a long-term strategy, not just a focus on growing your account balance. Your retirement savings rate – the percentage of your annual income set aside for the future – is a critical factor to consider. Fidelity Investments recommends a savings rate of 15%, including employer matches. While this may seem ambitious, you can achieve it by gradually increasing your retirement contributions over time.
Small Steps, Big Strides
As Ann Dowd, vice president at Fidelity, notes, “Saving for retirement may seem like a steep mountain to climb, but the climb doesn’t have to be as steep as it looks.” By taking small steps now, such as automatically increasing your retirement contributions by 1% each year, you can make significant progress toward your target savings rate. With persistence and patience, you can turn small strides into a secure retirement future.
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