![]() My gas costs will go down because I won’t be driving to work every day. My kids will (hopefully) be done with college, so I won’t be paying for tuition. I won’t have to worry about a mortgage because I plan to pay it off before I retire. You may be thinking: My monthly expenses will be much lower in retirement. You’ve Got Some Big Expenses Coming in Retirement If Social Security is still around, that income will just be icing on the cake you baked yourself! Market chaos, inflation, your future-work with a pro to navigate this stuff.īut here’s the deal: If you consistently invest 15% of your income, you won’t have to worry about whether the White House or Congress will fix the mess that is “Social Insecurity.” That’s because your nest egg will be more than enough for you to live on during your retirement years and still leave a legacy for your loved ones. If that’s true, then you definitely don’t want to depend on it for your retirement income. Conventional wisdom says the program will stay in place, but there might be less money available to go around for retirees. 5 Is that a wake-up call? We sure hope so!Īdd to that a very legitimate question: Will Social Security even be around when you retire? Nobody really knows. To give you some perspective, the federal poverty level for a family of two (that’s you and your spouse) is $19,720. But don’t just take our word for it-let’s take a look at the facts.Īs of June 2023, the average Social Security benefit for retired workers was $1,837 a month. Many people say they’re counting on Social Security to pay for most of their expenses during retirement. Social Security Won’t Replace Your Income ![]() That’s why 15% is the bar for how much to save and you shouldn’t settle for anything less. Sounds awesome, right? Who doesn’t want to be a millionaire?īut what if you only invested 10%? Or just 4%-which is about the average personal savings rate in the U.S.? 3 In the long run, skimping on retirement saving could cost you and your nest egg hundreds of thousands of dollars (or even millions).ģ0-Year Investment Results (Household Income of $74,500)īottom line: Investing 15% consistently can pay off in a big way. Over 30 years, that could grow to about $2.61 million in your nest egg, assuming an 11% return. 2 Fifteen percent of that would be $11,175 a year, or $931 a month. The median household income in the United States is roughly $74,500. But the original question remains, why is 15% the golden standard? Well, buckle up-we're heading to statsville to find out. ![]() The big takeaway is this: No matter how much money you make, investing a portion of your income will put you on track for a secure retirement. And 8 out of 10 millionaires got there by investing in their company’s 401(k). 1 And when you can commit to investing those saved dollars into solid long-term retirement plan, that’s when it all starts coming together.Īccording to The National Study of Millionaires, 75% of millionaires said that regular, consistent investing over many years was the reason for their success. Is it having a huge salary? Wrong again.īelieve it or not, it’s your personal savings rate-how often you save your money instead of spending it-that makes a huge difference. Quick: What’s the most important factor when it comes to saving for retirement? Is it picking the funds with the highest returns or lowest fees? Nope. How Much You Invest Makes a Huge Difference But it’s helped thousands of Baby Steps Millionaires build wealth, and it’ll get you where you want to go-to your retirement dream. It won’t make headlines or get you on the cover of a magazine. Here it is: Invest 15% of your gross income into tax-favored retirement accounts-like your 401(k) and IRA-every month. There’s a lot of bad advice out there when it comes to saving for retirement, and many people get overwhelmed by information when they’re finally ready to start investing.īut really, you just want to know what percent of your income you should save for retirement to be financially secure.
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