It is not an abrupt occurrence for you to be financially secure at your time of retirement. It takes a lot of planning and commitment. Saving is of the ways you start preparing yourself for retirement. The fact is that very few people have made the calculation of how much they need to start saving for retirement. However, setting aside some cash for retirement is a habit that we should inculcate in us.
How much do you need to save for retirement? It is an important question that people who have dared to think about their retirement keep on asking themselves. Others have resorted to saving 10% of their salary. They are usually perplexed when a retirement calculator gives them figures stating otherwise. They thus get worried as to whether they are on the right path or retirement saving is an impossible dream.
The reality of the matter is that there is no obvious answer as to whether you are saving enough for you retirement. The 10% of salary is just a value that we use as the benchmark. It’s used by most people as a starting value in the early 20’s, but very few maintain it as they get to their 40’s. We will find ourselves failing to save in some months or years and occasionally dig into the savings. Some pros suggest that setting a higher target such as 15% of your earning to allow space for the eventualities.
We can never have a formula or percentage that will cut across all situations. You will encounter many variables that will determine the amount of money that you can save. These include your current savings that you have already made for retirement, the kind of lifestyle you envision at retirement, the age at which one intend to retire, the investment pattern that one follows before and after retirement as well as how much of your current salary you plan to replace upon retirement.
There are also other notable happenings such as your health care expenses, what is the intensity of medical care that you will need later on in life, and an overall combination of the costs that will be incurred. Putting all these into consideration will be vital in helping you decide how much you want to into your retirement nest.
Can a retirement calculator help me calculate retirement saving?
Your decision to consult a retirement calculator is good for setting you on the right path. You, however, need to be wise. A calculator ahs no capability of bringing onboard all the crucial factors talked about above. Some are quite powerful at their job but what they do is point you to the right road for you to think more about it.
We have pretty a lot of them out there and are so comfortable to use. The figures that they do give us should not stop us from thinking critically.
How then do I know I am saving enough?
With so many factors in play, how then can you be sure that your saving will be adequate to secure yourself a comfortable retirement? It would be a good idea to consult a good retirement calculator that has been trusted by the pros. Input your details such as what you have saved so far, the rate of your saving and then have a look at your current position depending on your salary as at the moment. If the figures given to you are indicating you may retire uncomfortably, manipulate the calculator by inputting late retirement date, saving more, or taking a different investment mechanism affects the figures. Regularly repeat the exercise and adjust your savings to help you be in the correct direction.
As you are saving for retirement or a different purpose, do not give up. Keep going on! Saving is rewarding, and the sacrifices that you make right now are bound to bear fruits later on in life. Those that are yet to start saving should begin to do so. You do not have to start big. Start small and watch yourself grow. As time passes, increase the amount that you are saving and you will eventually be able to start saving sufficiently without any difficulties. It is never too late or too early to begin saving. The phrase “I am too young to start saving” or “I am too old to start the saving”, is for the faint hearted and lazy guys that luck discipline in saving.
Rules to live by while saving for retirement
- Know and respect your retirement savings plan
Contribute to your retirement savings plan without giving up. The amount you save earns interest and grows as you watch. No your timeline and purpose to meet it despite the many opposing forces you may encounter.
- Never dig into your retirement savings
Consider your retirement savings as money that is no there. The very first time that you decide to withdraw your savings will be the time trouble enters. It will significantly hamper with your savings pattern. Even if you switch jobs, do not use that as an excuse to get your hands on to the savings. You have the option of leaving them to the current plan, or you can integrate them into the new plan set by your new employer.
- Follow the fundamental investment policies
The manner in which you save is as important as how much you will be able to save. Other factors such as inflation eventually affect how much you will save at the time of retirement. Put your savings in a variety of investments. Ask questions as to how your money is being invested. Diversifying will help you reduce the risk of losing your money and earning more. Be reasonable and don’t just invest blindly. Knowledge and financial security go side by side.
In conclusion, it is important for you to save some money for retirement. It is not wise for you to go into retirement while you have nothing that can support the lifestyle that you have always lived.