Retirement plans look like a lot, especially when you are also dealing with current financial needs. But the challenge towards savings is a way of ensuring that tomorrow is well provided for.
By Age 35
Ideally, it should be possible to have saved 1 to 1.5 times of your income per year. For example, if your gross income is $60000, then your target range for savings should be in the range of $60000-$90000.
By this, you should save at a gradual rate, preferably about 6% of your income when you are 25 years old, and gradually increase this yearly.
By Age 50
By now, you should have saved 3.5 up to 6 times your salary. This makes it possible and deals with life aspects such as increased cost of living or even job losses.
By Age 60
The American Council of Employee’s aim is to achieve 6 to 11 times the preretirement income. For instance, for an earning of $100,000, savings of between $600,000 and $1.1 million are effectively required for retirement income security.
Key Takeaways
Save Steadily: It is recommended that 15% of your income—including your employer’s contributions—should be saved each year for most people. Only higher earners should take more.
Start Early: Such flows compound early on, to your benefit—maximizing your gains. It takes time to build up the sum that can be saved; start with a small amount and try to save more and more.
