Knowing the amount, you should set aside at different stages of your life will help you answer your question of the exact amount you need for retirement. I can’t possibly be able to answer your question right away because different people have different needs. Asking how much you exactly need for retirement is like asking how long it will take you to move from California to Las Vegas.
Different factors will come to play right? Like are you traveling by bus, train or air? Even though I won’t be able to answer the question exactly how you want it, I can help you with tips to save for retirement as well as determining the right amount you should have saved before you retire. Just a tip, when you are borrowing money from institutions like Instant Loan it is always wise to compare loans and weigh which is ideal for you in order to get the one with the best interest rates. In order to know how much to save for use during retirement, you need to ask yourself some questions.
Key questions you need to ask yourself in order to determine how much to save for retirement.
As I have told you, we are not the same and what might be seeming much to save for you might be a small amount for another person. In order to determine the amount of money you should be saving monthly, annually or what you should have saved before you retire, you need to ask yourself the following questions:
- What do you want your retirement to be like?
Do you want the life after the workforce to be more of the same like the life you are having now or do you want it to be better? Are you thinking of having an early retirement? There is no wrong answer, whatever you envision your retirement life has a big role to play on determining the amount of money you should save for the future. For example if you want your life to be so much better than it is now, you will have to save more than you are saving right now, probably make it 25 percent of your income.
- How much do you make today?
Well, you can’t save what you don’t have right? What you are earning today is actually the basic start of calculating the amount you can save for retirement. The fact is the more amount you earn today, the more savings you will need to make in order to maintain your lifestyle or make it even better. You can even come up with a strategy of how much money you should be saving annually by your age bracket. For example you if you are between 25 and 34 you can save 19 percent of your income, 35-44 can save about 23% of the income, when you are in the bracket of 45 to 54 it is when you should consider saving the most by saving about 27 percent of your income especially if you did not start saving early enough.
- How much will you make from the social security?
The amount you will possibly receive from social security will play a great deal on how much you have to save. It will help you come up with the right plan as you estimate the perfect amount to save that is enough to last you through your retirement.
- When are you expecting to retire?
Most of the people saving for retirement actually save the money that is going to last them until they die. In most case the younger you are when you are retiring, the more likely you are going to live longer. In this case expecting that you will die a natural death not an accident, due to violence or anything like that. So if you retire earlier it means you will need to have more money saved to last you through your retirement. If you are to wait for a longer time before you retire, it means you can save even more because you will be working for a longer time. But you will really not be needing a lot of savings like a person who will be retiring at an earlier date.
- How are you going to invest?
Saving alone might not be enough to make your retirement better than the life you are having right now. This is why you will need to invest as much as you can so that during retirement you can just sit back relax and enjoy your investments. If you invest aggressively and smart you will not need to save a lot of money in the bank because the investments will be helping you out during your retirement.
- How old are and how much have saved already?
If you are young and you have saved significant amounts already then it means you will not need to save a lot in future in order to be in the same standard with a person who is older than you and have saved less amounts. The earlier you start saving the better.
Determining the amount you should save for retirement.
Considering your retirement date, if you start saving for retirement early enough the recommended amount to save is about 10 to 15 percent of your income. It is not a must, it is just a guideline assuming that you started saving relatively early during our career. If you start saving later during your career probably when you are about 37 years you will need to up your savings by saving more 20 percent of your income in order to maintain the lifestyle you are used to. Create a budget plan for your retirement and run a retirement calculation. After calculating the amount you feel that will be enough for you during retirement, multiply the number by 25. That way you can be sure that your retirement life will be more than comfortable. Don’t get in trouble just because you are trying to save for retirement just save at your own pace.