NEW YORK (MainStreet) — Back in March, we pointed to a Charles Schwab study that says near-retirees are significantly short on their retirement savings campaigns. After age 67, Schwab says, Americans won’t have nearly enough money to make it to age 86 -- the age U.S. workers estimate they’ll live to in retirement.
Confirmation comes from TD Ameritrade , and it puts a firmer number on the retirement shortfall U.S. workers are facing.
According to the Omaha, Neb., investment firm, baby boomers have saved $275,000 on average for their post-employment years, but estimate they’ll need $750,000 “to live comfortably.”
- This One Thing Will Help You Save More for Retirement
- High-Fee 401(k)s Eliminate the Tax Benefits for Young Investors, Yale Professor Says
- Workers Pocket More Cash with Lower 401(k) Fees
- Americans Hold Retirement Assets for Emergency Use Only
- Legislation Says American Businesses Must Offer Pension Retirement Plan
As a result, boomers need to start playing “catch up” right away via individual retirement accounts. Such plans allow Americans over the age of 50 to make “extra” contributions to their IRA or to their 401(k) plans at work – the contributions are above and beyond the contributions Americans can legally make on an annual basis to their retirement plans on a tax-advantaged basis.
Consumers have until April 15 to make catch-up contributions to their retirement portfolios.
TD Ameritrade breaks down the maximum account limits as follows:
- IRA contribution limits are $5,000 with an additional $1,000 catch-up contribution, for a total contribution of $6,000.
- 401(k) contribution limits are $17,500 with an additional $5,500 catch-up contribution, for a total contribution of $23,000.
- IRA contribution limits are $5,500 with an additional $1,000 catch-up contribution, for a total contribution of $6,500.
If you can’t manage a catch-up contribution for 2012, start off 2013 by stashing your tax refund check into an IRA or a 401(k) plan. Chances are decent you’ll get a tax refund, as TD Ameritrade estimates that 47% of Americans will get a check or automatic tax deposit from Uncle Sam this year.