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How much should I be saving for retirement?
By Tom Dunn | December 26, 2008
Amanda asked:
I am 25 and just started my new professional job, and the company I am with offers matching up to 10% of my annual salary. I went ahead and decided for them to deduct 10% out of my pay for this purpose (so I’ll get 20% annually), but with student loans to pay, and tons of taxes being taken out, I am wondering if this much is really necessary. What is the normal percentage someone at my age should save per year in order to have a secure retirement plan?
Sarah
I am 25 and just started my new professional job, and the company I am with offers matching up to 10% of my annual salary. I went ahead and decided for them to deduct 10% out of my pay for this purpose (so I’ll get 20% annually), but with student loans to pay, and tons of taxes being taken out, I am wondering if this much is really necessary. What is the normal percentage someone at my age should save per year in order to have a secure retirement plan?
Sarah
Topics: retirement planning |
December 26th, 2008 at 6:40 am
Whatever you’re comfortable with in the beginning. You can always add more to it later. When I got married in 73′ we put away $15 per week, then every other month we added $2 more and it worked fine
December 26th, 2008 at 5:56 pm
I just read an article the other day about this kind of thing. At our age we can save less and end up with more in the end. Soooo say you put 2,000 per a year into your retirment fund now, you can end up with close to a million by the time your retire. Whereas if you start saving in a few years at 5,000 per year you can still get to the one million mark, but your going to pay in more of your money towards that one million…. soooo i would aim for $2,000-3,000 per year so whatever percent of your salary that is, i don’t know…hope this helped a little
December 29th, 2008 at 7:35 am
Amanda,
I’m 25 as well, and I’m currently in the same situation as you. My company matches up to 6% of my annual salary, but I contribute 10% anyways. When I had originally, started my first job out of college, I didn’t contribute to a 401K plan, but I did contribute to IRA accounts.
It is difficult to fully assess your current situation with the information provided, but it does sound like you’re on the right track.
Below is a very useful calculator that you can use to estimate where you’ll be when its time to retire.
Cheers and best of luck,
Spencer
December 29th, 2008 at 12:04 pm
at your age it is very smart of your to be considering your retirement! save as much as you possibly can by the time you are of age to retire everything will be terribly expensive. the company i work for only matches up to 5 percent so that’s what i contribute. you may want to consider contributing 5 percent and then put the other 5 percent into a savings account until you can get your student loan paid off then increase your job contribution back up to 10 percent. always pay yourself too but put YOUR pay into the savings account. everything left over in my checking account when I get my next paycheck is transferred to a savings account. it may not be much but the way i figure it is I lived without it until payday i can live without it now too and I sock it away! it takes 100 pennies to make that dollar and those dollars will add up in time!
January 1st, 2009 at 11:45 pm
If you want to have ruffly1200 dollars a month when you retire you will have had to save around 35 million dollars in your life time….. I am more working on building a secondary source on income that will continue to pay you threw out your life. I work with a business team that has found a way to marry time and money and give me a way to have a secure retirement at an early age. If you would like more information feel free to go to the password is guest. At the end there is my email and voice mail system number, feel free to contact me at ether one.
~Diane
January 4th, 2009 at 10:51 am
You are doing exactly the right thing! The #1 factor that determines how comfortable your retirement will be is how much you contribute to your retirement plan. You will NEVER AGAIN have an opportunity to earn a guaranteed 100% return on your money!
Once that money is gone from your paycheck and you adjust to taking home a little less, you’ll never miss it. Your contribution is also tax deductible, so your tax bill will also decrease fairly significantly. In other words, contributing $100 will only cost you $70 in net pay.
January 5th, 2009 at 1:19 am
It should be 10-15% of your income INTO RETIREMENT. You can have more than that for other savings and investments. As for the debt go to google and search Dave Ramsey.
January 5th, 2009 at 6:30 am
research has shown putting more in at your age and stopping contributions at 40 is better than waiting to age 40 to max contributions, believe me there is no such thing as a better time to put more into your retirement, your doing the right thing.
Just make sure you have some money to play with now.