Monday, November 19, 2012

Saving or drowning?

I'm tiring of politics for the moment (I know--you too), so I'll endeavor to find other interesting things to talk about.... like saving money. Friends occasionally ask how much they should be saving for retirement, so I thought this might be of general interest. The chart below shows the percentage of one's income they should be saving depending on how long of retirement they're planning on (and how far away it is). To keep it simple, focus on the bottom half (which means you'll be living on 70% of your pre-retirement income). As highlighted, those of us ~30 years from retirement should be trying to sock away ~20% of our pre-tax income each year. Tough for sure, but it sure beats working when you're seventy. PS, notice what a difference waiting ten years makes.

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