How Much Should I Save for Retirement?
No matter where you are in your career, one important question to ask yourself is: “Am I saving enough money for retirement?”
If you’re like many Americans, the answer might be “No,” but there are things you can do to change that, and general guidelines to get yourself on track.
Financial experts say you should start saving for retirement as soon as possible, with a general goal of having enough income to replace 55% to 80% of your pre-retirement wages; the more you can save, the better off you’ll be.
Some of your best options to start saving include retirement plans such as a 401(k), 403(b), and Roth and traditional IRAs. These accounts allow you to build investments in options, such as mutual funds, that tend to earn significantly more over time than normal savings accounts.
So how much should you be setting aside? Fidelity, a financial services company, recommends savings guidelines for various ages:
- By age 30, you should have an amount equal to your annual salary saved.
- By 40, you should have three times your income.
- By 50, that number should be six times your income.
- By 60, you should have eight times your income saved.
- And if you plan to retire at age 67, you goal should be to have a retirement account of about 10 times your annual income.
Meeting all your savings needs can take a lot of planning. Working with a financial advisor who can counsel you, can be a big help, since investing comes with levels of risk.
While there is no magic number that you should hit, starting to save early and recalculating over time, can help ensure that you can retire with enough money to meet your needs. Talk to a banker near you about how you can start saving early today!