Monday, April 14, 2014

We probably should be saving a bit more money

Considering the long-term unemployment issues affecting older workers here (noted here), I imagine many are suddenly finding them far short of what it takes to live off of their savings. And that's unfortunate for sure. As a refresher for those of us still in the accumulation stage, I'll plot the results of various savings rates over different time periods. Note that this assumes one starts with $0 and sees 5% annual growth, which is a plausible inflation-adjusted rate that you may get in your 401k or IRA.

Note that 1) saving even modest amounts per month can lead to substantial sums and 2) starting early makes a world of difference.

Recall that if you want to pull $30,000 per year from your retirement accounts (to supplement the average $15,000/yr social security benefit), you'll need roughly $750,000 overall (because of the rule of 25).

If you want to accomplish this, check out this impressive wiki from the Bogleheads for solid advice that lets you organize your investments and move on with your life.

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