How Much Should You Save For Retirement?
January 4, 2022
JANUARY 4, 2022: No matter what career phase or life stage you’re currently moving through, you may have struggled to put enough money in your retirement accounts and wondered what percent of your income should be put away for retirement. Even if you’re aware of the crucial long-term importance of saving for retirement, you may still find financial advice on the matter conflicting or confusing. In order to have a fully fleshed-out and workable Retirement Strategy ready to go, it’s important to understand how much you actually need to put into the bank every month. Here are the main takeaways to focus on following.
Plan To Put Away a Minimum of 15% of Your Pre-Tax Monthly Income
Although the exact amount to stow in your retirement account can vary based on several factors, a general number to guide you is about 15% of your pre-tax income each month. You can place these funds in retirement accounts such as:
- An employer-sponsored pension or retirement plan, such as a 403(b) plan or a 401(k) plan
- An individual retirement account, such as a traditional or Roth IRA
- A money market account or another stable investment type, such as a certificate of deposit
Use a Few Clever Tricks To Pad Your Retirement Bank Account Over Time
Making some tweaks here and there to your budget or lifestyle could help pad your retirement funds. To grow your accounts, you could:
- Increase your savings by at least one percent every year
- Put the maximum possible contribution into each retirement account, and invest in at least two or more accounts
- Place some of your savings in tax-deferred or tax-advantaged accounts
- Hire a professional financial manager to place a portion of your account into high-yield funds and stocks
Adjust Your Typical Savings Based on the Age When You Began To Save for Retirement
The amount you should be saving may depend on your current age. Generally, remember you should:
- Automate savings in the early stage of your career to ensure you put away 10% or more
- Save 15% to 20% of each paycheck in the middle stages of your career
- Save more aggressively and aim to put away 30% or more from each paycheck if you begin saving for retirement in the last ten to twenty years of your career
Before you can start building a fleshed-out and viable Retirement Strategy, you need to understand the financial bedrock that can support your retirement plans, whatever they may involve. To have a comfortable and low-stress retirement period, remember to put away 15% or more per paycheck depending on your career stage, adjust your budget or lifestyle to pad your bank account, and adjust your savings goals based on age. With these rules of thumb, you can save a sizeable chunk of cash to sustain you through your older age.
About 1891 Financial Life
At 1891 Financial Life, we pride ourselves on giving back to the communities that we serve by providing quality and comprehensive insurance solutions. We are a not-for-profit life insurance Society, which means the sales from these financial service products help fund member benefits along with social, educational, and volunteer programs designed to respond to community needs.
Our portfolio is extensive, ranging from various life insurance policies to our MYGA to support your financial needs no matter what stage of life you’re in. For more information, contact us at (855) 804-7424.