What percentage of my income should i save for retirement savings ?
I need to start saving for retirement. Is there a rule of thumb that could get me started.. Like 5% or 10% of my income... I need some basic advice on what to do.
Public Comments
- If you're just starting working, 5% or more. Longer you hold off, the more you have to save and the longer you have to put off retirement.
- Most Retirement Planners agree that one needs to have a retirement savings of close to ten times your annual income. So consider how many years you plan on working and rate of return on retirement investment and the dollar amount you plan on saving, then calculate how much you will have at your target retirement date. Consider eliminating all your debt before saving for retirement. Consider also, saving at least 6 months of salary for an emergency fund. You will have more money to invest in retirement, and if the economy goes south or you lose your job it will not cause you to dip into the retirement fund--taking a major tax hit for early withdrawal. Then consider making the max contribution into a 401K, or IRA. If you are self-employed look into starting a SEP retirement plan.
- It depends on how old you are, and how much you think you'll need in retirement. The general rule of thumb is to put aside at least 10%, but if you're older, then you may want to put away closer to 20%.
