Planning for your retirement is a lifelong process. It includes assessing your living expenses and other financial needs while putting money aside so you can access it in the future, but how much will you need?
Some hope to have as much as $1 million saved by this point, and others simply save what they can, hoping to be able to adjust. Many advisors say that 80% of your regular earned income should be enough to sustain you after retirement.
Whatever number you need and can set aside will be personal to you. The most important thing is that you save as much as you can during your working years to prepare for your retirement. Here are a couple of ways to do just that.
It is wise to set goals for yourself regarding retirement savings. With each stage of life, you have unique opportunities to invest in your future. Starting as young as 21, you can make small investments that can double and triple in size thanks to compound interest.
Between the ages of 35 and 50, you may have greater financial responsibilities but will hopefully be making more money. This is an ideal time to focus on your investment accounts and learn as much as you can about earning potential.
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It is never too late to start saving for retirement. Even after the age of 50, you can still open an investment account. At this age, you are also allowed to make higher deposits as “catch-up contributions,” which may be easier if you have paid off big purchases by this point.
While there is much more to retirement planning than just a savings account, this is one important way to prepare for the future.
