You’ve probably heard that you need to save at least 10% of your income for retirement, but where did that number come from? And is it really enough?
The 10% savings rule of thumb comes from a variety of sources, including financial experts, retirement calculators and employer-sponsored retirement plans. But there’s no one-size-fits-all answer to the question of how much you need to save for retirement.
Your retirement savings goals will be unique to you, based on factors like your age, income, lifestyle and health. However, there are some general guidelines you can follow to help you determine how much you need to save.
A good rule of thumb is to save 10% of your income for retirement. If you start saving early, you may be able to save less than 10% and still reach your goals. But if you start saving later in life, you may need to save more.
The 10% savings rule is a good starting point, but it’s not the be-all and end-all. If you want to retire comfortably, you may need to save more than 10%. And if you’re aiming for a luxurious retirement, you may need to save even more.
No matter how much you need to save for retirement, the important thing is to start saving now. The sooner you start, the easier it will be to reach your goals.
If you’re not sure how to start saving for retirement, there are a few things you can do.
First, check to see if your employer offers a retirement savings plan, such as a 401(k) or 403(b). If so, sign up and start contributing.
Second, open a retirement savings account, such as an IRA. You can open an IRA at most banks and investment firms.
Finally, make a budget and make saving for retirement a priority. Decide how much you can afford to save each month and make sure you stick to your plan.
Saving for retirement may seem like a daunting task, but it’s important to start sooner rather than later. By following the 10% savings rule, you can make sure you’re on track to a comfortable retirement.