1010 B Street,
March 26, 2020
What is your most powerful tool for building retirement savings? Perhaps, your income. For that matter, the path of your career could influence when and how well your retirement begins.
Is there merit in changing jobs (or even careers) with an eye toward what the move might do for your retirement? One job may offer you a better type of employer-sponsored retirement savings account than another. One employer may offer to match your retirement savings account contributions, but another may not. (Fidelity says that the average employer match reached an all-time high of 4.7% last year.) Perhaps one workplace will offer you dedicated accounts to save toward health expenses. Beyond these attractions, there is the potential of greater income, which not only boosts your retirement savings potential, but may also positively influence your Social Security benefit calculation. Social Security determines your benefit through a formula that calculates your average monthly income during your 35 highest-paid working years, so changing jobs for better pay can potentially have both an immediate and future impact on your income. If you want to stay where you are, then think about the positive effect a raise or a promotion might have on your present financial situation as well as your retirement prospects.1,2