Deciding how much money you should be saving towards your retirement each year can definitely be confusing. There are a few ways to figure out how to know exactly how much to put into your retirement savings. When deciding how much you should be saving you need to think about a yearly savings rate, a savings factor, an income replacement rate, and a withdrawal rate.
As a general rule, you should save at least 15% of your income, before taxes. Also, you should plan to save that much between ages 25 and 67. This can help insure that you will have enough savings in your retirement funds before you retire. 15% of your income may seem like a lot, but if you have a 401(k) or have another account that your employer matches, then those annual savings count towards that 15% also.
One of the most important things that you can do, is to start saving early. We’re probably beating a dead horse here, but the more time you have to save, the earlier you start. It’s hard for young people to care or wrap their minds around retirement, but it’s extremely important to start thinking about saving for retirement while you’re still young. It’s also important to note that many young individuals don’t have mortgages, children or other costly expenses, so it may be easier to add more to your funds now, rather than later.
If you don’t plan on working up until you are 65, you may need to save more than 15% a year. However, on the other hand, if you plan on retiring later, you could probably do with having a lower savings rate.
Of course it’s not easy to have a worry-free retirement when you’re retirement nest-egg is still invested on the risky stock market. On-going fees and commissions along with the risk and corruption that exists within the financial industry could cost you a great deal of your retirement savings…money you can make up if you’re already in retirement and not working. Get educated on the exclusive Crash Proof Retirement System- guaranteed to protect your principle so when the market crashes, your accounts satay event, but can also be designed to generate income and take advantage of market increases. Start your education today by calling 1-800-722-9728 or go to Crashproofretirement.com and register to attend a no-cost/no-obligation educational evet with the creator of the proprietary Crash Proof Retirement System: Phil Cannella.