So, just how much should you save for retirement? There are so many variables that go into the calculations of what you will need to have saved for your retirement. There is that unknown date that you will live to, be it 85 or 95 or even in the hundreds. This makes an enormous difference to the amount of funds you will need to have to live on comfortably once you fully retire, or are unable to work any longer.
Unfortunate too is the current state of the economy which has taken its toll on people’s earnings, so that many are struggling to survive on their present income, let alone be able to save for the future. And in some cases too, families have had to break into their savings so they can eat, and have a roof over their head, while they look for some way out of their financial difficulties.
Then there are the variable rates that your savings will make whether they are in a regular savings account, or an individual retirement account (an ira), or a Roth Ira, that can vary too, and will likely change over the years too, for 1 or 2 percent to may be even 10 percent if the economy turns around successfully.
I saw a frightening report that suggested that if you start saving in when you are 50, then you will need to save a whopping 50 per cent of your income so that you can live decently after you have retired.
Obviously, the sooner and the younger you are when you start saving, the better it will be for your retirement funds. For example, if you are in your twenties saving 10% of your income for your retirement fund can at least give you some peace of mind.
But how can you do this, especially as a society that has got used to having the best things now, thanks to credit cards? Hundreds and hundreds of people not only don’t have savings, but thanks to credit cards and other financial problems they are in debt to the sum of thousands. Then it becomes a task of what to do first, pay the credit cards, or pay into a savings account, assuming that there is some extra money at the end of the month. Unfortunately for many, it is the other way around, and there is extra month at the end of the money.
So what can you do? For many the answer will be keep working for longer, so that you can have some retirement funds. Of course, you may have to change jobs, to something less strenuous or demanding as you get older. In an ideal world, you would be setting up a business now, perhaps online, that you can easily continue as you age, but that’s up to you.
The best advice I can give is to start your retirement fund as soon as possible, making as many contributions as you can as often as you can, and then you can watch your funds grow. Remember, if you start saving in your fifties, you’ll need to put 50% away for your retirement – that’s enough to give anyone a heart attack! Start to save for your retirement now, if you haven’t already.
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