It’s never too early to start saving for retirement, but it can be challenging if you have debt, expenses that drain your income, or have no idea how much you’re saving from year to year.
A good rule of thumb suggested by a recent Fidelity study is to have one time your income in savings by age 30. By age 40, that savings should increase to three times your annual salary. By age 50, six times. By age 60, eight times, and by age 67, 10 times your annual income.
It’s important to remember benchmarks set by age are a good way to check in on your savings but are not rules set in stone. Your income greatly influences how much you can save and can fluctuate over time, so make sure you adjust as needed and save enough money now to have the lifestyle you want when you’re older.
In this episode, John shares tips for how to know if you’re on the right track for retirement.
In this episode, you’ll also hear:
- Saving for retirement based on age and salary
- What young people need to know about saving for retirement
- Option to delay retirement and why it pays to participate in the market
[00:04:25] The thing that can rob you the most, when you’re young particularly, is if you have debt. I would focus on getting rid of that consumer debt as soon as possible.
[00:07:15] Owning a home is a wonderful thing but you need to be careful that you’re not buying too much home because your home is not a retirement asset.
[00:09:36] You also have to keep in mind your income rises through the years and that factors heavily in these numbers that you’re looking at for the benchmark. As far as making up the gap, you could be more aggressive…the stock market over time tends to provide the best long-term rate of return.
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Disclosure: The following program is sponsored by Fourth Avenue Financial, which is solely responsible for its content. Securities offered through J.W. Cole Financial Member FINRA SIPC, Investment advice offered through J.W. Cole Advisors. Fourth Avenue Financial, J.W. Cole Financial, and J.W. Cole Advisors are unaffiliated entities. The opinions expressed by John K. Burdette II should not be construed as specific investment, legal, or tax advice. All economic and performance information is historical and not indicative of future results. Investing may involve the risk of loss of principal. Any Tax advice on this show is not intended to be used by any person for the purpose of avoiding US federal or state tax penalties that may be imposed on such a person, and each listener should seek advice from their tax advisor or legal counsel on topics that arise from the show. John K. Burdette II is not providing legal or tax advice. Nothing should be construed as solicitation of an offer to buy securities.
The preceding program is sponsored by Fourth Avenue Financial, which is solely responsible for its content