The average American is far from ripe for retirement.
Forty-six percent of baby boomers have not saved retirement at all, according to a study by the Insured Retirement Institute, and 81 percent of Americans are unaware of how much they need to save to retire comfortably, researchers from Merrill Lynch said ,
If you're one of those people, you're far from alone. But even if you forego retirement, it does not mean you can not catch up. In fact, it is much easier than you would have imagined to dramatically increase your savings.
Booting up your savings
You do not have to win the lottery or earn a massive raise to save enough to retire comfortably. Although it seems an impossible challenge, according to a recent study by Morningstar, it's not as difficult as you might think.
Researchers used the Fed's 2016 data to analyze 3,916 households across the country eight different lifestyle changes could cause people to increase their chances for a comfortable retirement. In total, they conducted around 400 million simulations to find out which of these changes would most effectively help people significantly increase their savings.
The researchers found that the two things that gave workers the best chance of retiring, social security benefits delayed until at least 67 years and contribution of 6% of their salary to their pension fund. With these two changes, households would have increased their chances of having sufficient retirement income from 25.6% to 71.2%.
Of course, these two measures do not guarantee that you will have enough money in your retirement because every situation is different. However, delaying social security benefits and even slightly increasing your pension contributions will allow you to make substantial profits over time to help you retire better.
Why Small Changes Can Provide Significant Profits  It is understandable to seek benefits as early as possible to make use of this extra money, but instead of delaying benefits only by a few years , you can get even bigger checks.
The earliest date on which you can receive social security benefits is the age of 62. However, if you submit before reaching full retirement age (FRA) or the age at which you receive 100% of benefits. Benefits are reduced by up to 30%.
If you increase your pension contributions by a few thousand dollars a year, you can get tens of thousands of dollars over time thanks to the high compound interest.
To see how much more you could save by making these two simple changes, let's take a hypothetical example. Let's say you are 45 years old and have hidden $ 40,000 in your pension fund. You earn a salary of $ 50,000 a year and you currently pay 3% of that ($ 1,500) to your 401 (k). Let us also say that your employer complies with this article, saving a total of $ 3,000 a year. If you increase your annual contributions to 6% of your salary, you now pay $ 3,000 a year plus the additional $ 1,500 from your employer, bringing your total to $ 4,500 a year. Assuming you earn an annual return of 7% on your investment, you will see the sum of your savings here if you continue to contribute 3% of your salary, compared to 6%:
3% of your salary Salary ($ 3,000 / year)
Contribution of 6% of your salary ($ 4,500 / year)
$ 74,562 [19659020$83792
So while An extra $ 1,500 a year (or $ 125 a month) may not seem to be a dramatic change, it could be more than $ 65,000 over 20 years.
If you then consider the boost you receive in benefits by waiting a few years for the file, you'll have an even bigger retirement pillow. Suppose you are 45 years old, your full retirement age is 67, and you are entitled to a basic benefit of $ 1,300 per month (that is, how much will you receive if you submit to your FRA). If you start at 62 at the earliest, your benefits will be cut by 30% and you will receive $ 910 per month (or $ 10,920 per year). Here's how much you could miss by claiming early instead of having to wait until 67 to claim:
Lifetime benefits eligible for 62
Lifetime benefits eligible for 67
62  $ 10,920
$ 196,560  $ 202,800
Although you would miss the benefits for a few years, the larger checks might give you tens of thousands of dollars bring more lifetime benefits, provided you live to your mid-80s. (For the context, the current life expectancy for a 65-year-old is around 85.)
One of the biggest benefits of waiting for social security benefits is that you receive larger checks for life. So if your personal savings run dry and you live solely on social security, this extra money can help cover the bills. Precisely because life expectancy continues to rise (according to the Social Security Administration, one in four people today turning 65 may be over 90 years of age), it is important to consider what you will do if you do not Have retirement pension more.
When you come back to your savings, it's easy to think that you can not catch up. But it's never too late to start saving, and sometimes it's easier than you think to adjust your strategy and get back on track.
|Age||3% of your salary Salary ($ 3,000 / year)||Contribution of 6% of your salary ($ 4,500 / year)|
|45 (Today)||$ 40,000||$ 40,000|
|50||$ 74,562 [19659020$83792|
|55||$ 123,037||$ 145,212|
|60||$ 191,025||$ 231,358|
|65||$ 286,383||$ 352,181|
|Age||Lifetime benefits eligible for 62||Lifetime benefits eligible for 67|
|62  $ 10,920||$ 0|
|67||$ 54,600||$ 15,600|
|70||$ 87,360||$ 46,800|
|75||$ 141,960||$ 124,800|
|80||$ 196,560  $ 202,800|
|85||$ 251,160||$ 280,800|