Saving money for retirement is important. However, how much do you truly need to save? You certainly do need to save money, but determining the right amount for your needs can be a struggle. For those planning their retirement years, here are a few tips.
The simplest way to look at saving for retirement is that you want to have about 80 percent of your annual income available each year to see you through those Golden Years. That’s a pretty high percentage, and it goes up as your standard of living increases.
For those starting to plan for retirement at a young age (the best time to start, actually), it’s highly advised that you put about fifteen percent of your monthly earnings into savings. Over time, this will add up to a considerable amount, and with the right retirement savings fund, you will earn interest, as well.
For older people looking at the impending arrival of retirement age, the situation becomes more problematic. If you have no savings and retirement is only a decade or so away, you need to start socking away as much money as possible to hit that 80 percent amount. However, you should be prepared to not have enough money to quit work entirely. You might only have enough to supplement a part-time income from a job.
Planning for retirement should start early in life, particularly if you want to enjoy a life of leisure with no work when you retire. However, for those who simply want to enjoy more leisure while maintaining a job, saving for retirement can be a bit simpler.