How much do you suppose to save for retirement?

When you are young and just starting out, there are a million things you want or need to spend money on, and very little money to go around. Over time, you can build up some money. You do it in several ways. So how much you save will depend on how much extra money you have. I know this is not what you asked for, but here are my: Basic tips for financial success!

1. Living below your means. If the bank will approve you for a $20,000 car loan, you get one for $12,000 (I'm 55, have only ever owned 4 cars, all of which were used.) Understand that a car is "reliable transportation." Nothing more. It is NOT a status symbol.


2. Never leaving FREE money on the table. If your employer offers a "match" on your 401K, whatever amount is matched, you contribute. So, if you put in 6% of your salary, they put in another 6%.


3. Learn to distinguish between "wants" and "needs." Marketing experts make you think you "Need" everything. I'm still in disbelief that middle class Americans are paying $5 for a cup of coffee, and full drink price for water! Yes, you are entitled to a vacation. But you don't have to take it in Hawaii!


4. Set goals. Short term: getting married, mid -term: buying a house; long-term: sending kids to college, etc. . .


5. Create and maintain an emergency fund. This is ready cash that you can use to pay for car repairs, dental work, etc.


6. Insurance. Don't skimp on insurance! If renting, get renters insurance. Medical, dental, and don't overlook disability insurance. If you get sick or hurt and cant work, the world starts to fall apart really fast. And don't think nothing bad will happen to you simply because you are young.


7. Protect your credit rating! People with a good credit rating can borrow money at a low interest rate. If you do take out loans or use cards, keep it under control. Pay off the ones with the highest interest rate first.
   8 . When you start investing, and run into a financial crunch, don't touch the investments! Sacrifice. Be frugal. Turn up the thermostat. But don't touch the investments!


8. When you get pay raises, or pay off a bill, increase the amount you are investing.


9. To go with what James said above, If you do get married, have a pre-nup. Or, never get married???

So let's say you figure you have an extra $60 a month. Put $40 in your emergency fund, invest $20. As the emergency fund gets larger, reverse it. You should have enough ready cash to pay 3-6 months of living expenses. That is a lot!! But, it is very important to start young with investing. So always put something aside! Use automatic deduction from your paycheck, and you will not even miss it!

I don't claim to be an investing expert, but wanted to give you some basic financial advice to think about.

Kim

The rule of thumb is to save and invest 20% of salary annually, and the trick is to (a) start while you're young, (b) invest in good quality growth and dividend stocks and stock funds, (c) try to use a plan that automatically invests for you monthly, and (d) never get divorced. Also avoid credit card debt and buy and pay off your home as soon as you are able.

Invest in things you understand. I am retired and get income from a rental property. Stocks and bonds as well as a sep program gave me some basis to afford the purchase of that property. The real question is what lifestyle do you have now and what do you want to do in the future? How is your health and how old do you realistically expect to live?
I know people who are working after turning 80 because they are uncomefortable not working. What do you you do with non work time now? Make a list? What does it cost? How much do you owe? Pay down debt first.

You need to put away as much as you can when you are starting in your career. My kids have just graduated from college and i told both to put 15-20% in their 401K. if you do this when you start out you will never miss it as you never really had it to spend. If you want to work until your 80 then you put less away however nobody plans to work that long and most people are retiring at an earlier age. Get a financial advisor once you have started a good paying job and thell them what you want to do, buy a car, a house, and what is your ideal age to retire. they will help guide you in the right direction.

First make sure that all of your debt is taken care of. Next, think about the lifestyle that you want. How much a month would you need to live In? Where are you trying to live? You have to consider the cost of living in that particular area. Think about residual income. In other words how can you make money without actually working.

Also, think about how much you make. You should have anywhere between 6-12 months if income saved up before you retire. Check to see if your company has a 401K or any other kind of savings plan. You can also invest on your own.

it is very deceiving how much money you will need to save for retirement and factors like, whether or not social security will be around, employer pension plans, healthcare costs, etc however you should take it upon yourself to fund your own retirement - as soon as you get your first fulltime job you should take advantage of any incentive savings program your employer offers - even if you save a very small amount at first, it compounds and over your entire work career it will add up. It was given some advice by a financial planner that I have tried to live by - for every 3% raise you get - 1% is for taxes, 1% should go into your incentive savings plan and 1% is for you, so over time you are increasing your contribution to the incentive savings plan but not really missing it. Obviously as your circumstances change (college loan repayments, children and their associated expenses, etc) you will need to adjust. BUT always put as much in a protected savings plan (one that you don't have easy access to or their are penalties for withdrawal) as you possibly can so that you are in the best possible shape for retirement.

The money that you need to have a comfortable retirement life is very subjective and there is nothing like one size fits all. However there are general rule of thumb that you can apply like the following:

One may need atleast 70% of your last drawn salary during your retired life.
In order to draw the amount that equal 70% of your salary from your saving, you will need 25 times of that amount as your total saving.