The responsibility of saving for one’s retirement has shifted from corporate to the individual. One’s retirement depends on how well you plan for your retirement as well as how much you spend and save.
In 2007 almost half of workers had little to no savings at all. Workers ages 55 – 64 had less than $100,000 in savings which would mean that most of them would have to work past the retirement age or live in poverty. If this trend continues, by 2030 the difference between what Americans have and what they need for retirement will be about $45 Billion. The sooner you save the better.
How much does a person need for retirement?
Studies show that if you want to live the current standard of living during retirement then you need about 80% of your preretirement income. And a rough and fast way to calculate how much you need to have saved in total for retirement is to divide your desired annual retirement income by .06. So for example, if you want an annual retirement income of $50,000, then you will need to have saved $833,333.
How much do you need to save each month to obtain your retirement nest egg?
This depends on various factors, including but not limited to your age, intended retirement age, current income, retirement income sources, and rate of return on your savings. Roughly, if you have 35 more years until retirement and need to have $1Million, then you will need to save about $435 per month. With 20 more years then you need to save about $1700 per month.
So now that you have a basic idea of how much you need to save, now you need to learn about the kinds of tools that are available to help you. These things include understanding how savings accounts work, including IRAs and their associated tax benefits.
This news posting was brought to you by Pay1Day.com, a company dedicated to providing immediate cash assistance to borrowers.