What number should you strive to reach?
Brought to you by the MEMBERS Financial Services Program* located at SLFCU
The earlier you start saving for retirement, the better. The big question on the minds of many savers, however, is “Am I saving enough?” This article will show you some rough milestones to try to reach. Keep in mind that you may need to save more or less than these amounts based on your objectives, lifestyle, and income needs.
By age 30, you should save the equivalent of a year’s salary. Some 30-year-olds have the equivalent of a year’s salary in debt. However, it’s possible to manage debt while saving and investing to build wealth simultaneously. One way to reach this goal is to save (and invest) about one fifth of your after-tax income beginning at age 25. That assumes you start at 25 with no savings; if you start saving and investing earlier, the goal may be easier to attain.1
By age 40, your savings should be triple your yearly earnings. The average American currently saves about 3.5% of his or her income. Can you save 3.5% of what you earn at 25 or 30 and build a six-figure retirement fund by your 40th birthday? Perhaps, if you are an investing wizard or start your career with a salary north of $100,000. Otherwise, saving and investing 10-15% of what you earn annually will be crucial to reaching this goal.1,2
By age 50, your savings should be about six times your salary. Slow and steady saving and investing could get you there, but building up $250,000 or more in retirement money can be a challenge given factors like child-rearing, divorce, periodic unemployment, or health concerns. One solution is to adjust your discretionary spending habits, if life allows.1
By age 60, your savings should equal eight or nine times what you earn annually. Amassing $500,000 or more in retirement assets should be a priority. If you haven’t achieved this level of assets, consider other options for generating retirement income. Social Security benefits may help supplement your personal retirement savings. The equity in your home may provide another source.1
Saving and investing 10-15% of your annual pay merits serious consideration. Through recurring contributions to tax-deferred retirement savings accounts, you can make saving and investing a regular process. Your future self will thank you.
MEMBERS Financial Services may be reached at 505.237.3930 or by emailing firstname.lastname@example.org to schedule a no-cost no-obligation appointment.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
*Securities sold, advisory services offered through CUNA Brokerage Services, Inc. (CBSI), member FINRA/SIPC, a registered broker/dealer and investment advisor. CBSI is under contract with the financial institution to make securities available to members. Not NCUA/NCUSIF/FDIC insured, May Lose Value, No Financial Institution Guarantee. Not a deposit of any financial institution. FR-1980033.1-1217-0120
1 – cheatsheet.com/money-career/how-much-money-should-have-based-on-age.html/ [9/20/17]
2 – businessinsider.com/how-much-you-should-have-saved-every-age-2017-9 [9/18/17]
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