Have you ever asked yourself the question, “At what rate should I be saving for retirement?” If so, you should keep reading. With this question, you are probably wondering if you need to save 5%, 10%, 15% or more for retirement. .
I think a better way to phrase and think of the question is:
What is the MINIMUM percentage of my current income, I need to save to retire to the lifestyle I am accustomed to living now?
- Is it the amount to receive the full company match on my 401K?
- Is it 10% of my income?
- Is it 15% of my income?
- or is it a higher percentage of my income?
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To determine the saving rate needed to fund your retirement lifestyle, you first need to establish how much of your current income, you will need to replace. You have to ask yourself, if you need to replace 50%, 70% or even more of your pre-retirement income. The next step is to determine the percentage of your income you need to save during your remaining working years, so you can reach your retirement goal. No matter what percentage of your income you can start saving now, you have 3 keys to establishing a retirement savings plan that will end in success.
- Save consistently
- Increase savings as your income grows
- Monitor your progress
You can read some of the latest research on how much you should save for retirement by Massi De Santis Ph.D. & Marlena Lee Ph.D.
At what rate do you save for retirement? You can leave your response at the end of this blog. Also do not forget to follow me on Twitter @IfAdvice or on Facebook StalwartFinancialPlanning
Author
Isaac is a Fee-Only (no products sold) Certified Financial Planner® Practitioner. Isaac founded Stalwart Financial Planning with offices in Fayetteville NC and Durham NC. Isaac provides comprehensive planning and investment management services to individuals from all walks of life. Isaac can be reached by phone at 910-867-8464, or by email (iallen@StalwartPlanning.com). Visit him at Stawart Financial Planning www.StalwartPlanning.com.