In general, what percent of your income goes toward retirement savings? My husband and I currently put about 15% of our income into retirement plans. We're still fairly young and don't have kids yet. We don't know if this level of saving will be sustainable for us once we have kids, but we think it's very important to start saving early. If you aren't saving for retirement, why not? (Pension plan, expecting social security or other government benefits, already funded or independently wealthy, relying on family, etc.)
I save about 10% of my income but it's not for retirement. I'm focusing instead on investing. When I'm too old to work I'd be earning enough money to live on from said investments. But for any emergencies that might arise, I put aside 10% of my earnings.
I think it very wise to start saving for retirement as early as possible - as I can assure you that you will need more funds than you realize - which is something that I'm currently finding out - even though I haven't quite yet reached that age and have contributed a large part of my income to a pension fund for the majority of my working life. However that said - I have to say that this is a somewhat tricky subject - as although its recommended that people should save at least half their age as a percentage of their current salary in order to have enough money to live comfortably throughout their retirement years - which for example means - if you were 30 and earning $30,000 a year - that would be $6000 a year or $500 a month out of your net salary. Although that sounds like a good amount - realistically speaking with the economy as it is and life expectancy far greater than it used to be - together with the fact that many people once they reach fifty find it near on impossible to find work - unfortunately even that amount of savings wouldn't necessarily guarantee an adequate enough sum for someone of that age - once they hit retirement age - to be able to live out their retirement years in comfort - that is of course if retirement hadn't been totally phased out by then.
Your post makes it sound like you think investing and saving for retirement are two separate things. When I put money in my 401k or IRA, I am investing that money in a combination of mutual funds, stocks, bonds, REITs, etc. That's how the money is able to grow faster than inflation so that there will be enough in my accounts by the time I retire. Ideally, I will have enough of a nest egg that I can take out the interest I earn each year to live off of without touching the principal so my nest egg doesn't actually get smaller. In reality, that takes a lot of money, so it's more likely that I would eat away some at the principal each year, but not so quickly that the money runs out before I die. I've never heard that you're supposed to save half your age as a percentage. That seems like it would be fine when you're young, but as you reach retirement it kind of seems impossible. Retirement will never be phased out, though the target retirement age will likely climb as we remain healthy for longer and live longer. Most people eventually reach the point where their health doesn't really make feasible for them to work any longer.
I prefer to be in control. That way I stand a better chance of retiring early should I desire it. For example I could start a business that will make me enough money to live on. I could quit my job and focus my attention on the business. I could then save some of the profits for retirement [because eventually our health will decline as we age].
I think the reason why you may not have heard this before - is that as its only relatively recently that the majority of financial institutions starting issuing these guidelines - they maybe haven't yet reached your area - however as they came about after a well respected financial institution ran an ad campaign that read " Will you outlive your retirement funds? " - as its very likely that statement will apply to most people - I certainly think they are worth taking note of. Although in an ideal world it would be assumed that most people would stop working eventually - as their ill health really wouldn't make it feasible to work any longer - in reality this is not necessarily true - particularly as there are currently already many, many elderly people - although they thought they had adequately provided for their retirement - who because they are now having to make the choice between eating, heating their homes or even keeping a roof over their heads and especially so during the winter months - that are having to supplement their retirement incomes by working any way that they can - even though their health is so bad that it wouldn't be feasible for them to work.
I read a fair amount about personal finance and try to keep up with the latest news and recommendations and I haven't heard a peep about saving a percentage of your income equal to your age. I've also tried googling to find more information about it, because it really seems nonsensical to me. Do you have a link to a source or even the name of the financial institution that's recommending this? I'd like to investigate further. On the retirement issue, there will always be people who can't afford to retire, but that's different from saying retirement as a concept will be phased out. We're in a weird spot right now because when most baby boomers started working they were expecting to get pension plans like their parents did which would take care of them comfortably through their golden years. As companies phased those out, suddenly the individuals had to cover everything themselves and they were already decades behind on saving. However, we are seeing more young people saving responsibly and planning for their future. Those in Generation Y and the Millennials have watched their parents struggle to catch up, and are learning. I think we will see a larger percentage of the population able to prepare themselves for retirement as we move forward.
Retirement is something that I don't think about much. I am rather concerned in investing at this stage. I have got several nest eggs that have been gradually growing over the years. By the time I retire they should be quite substantial. I have further plans how I will be investing those funds when the time comes, to ensure that I will have a good income until the day I die.
If I'm being honest, I am not putting anything away specifically for "retirement" at the moment. I am looking into buying some property to let, and I am hoping that the income from that will be enough to see me through. Of course, it is a little bit risky, as there is nothing to say that the rental market will still be good then, but I will at the very least have the property to sell and then a lump sum. I suppose I should put some away, but I feel that there is plenty of time to do that in the future, and probably no reason to be worrying about it right at this moment in time.
Our savings is pretty small. I'd say we save about 2% of our net income for emergencies. With retirement, there's no plan for that since I have a retirement pay from my office. We don't have any investment to speak of except our house where we live in and the 2 cars that we use for our daily travels. Maybe some 5 years from now, we would have substantial savings that we can have for retirement.
On our part, I'm more on the saving part while my husband is more on the spending part. I realized that we won't be able to save for our retirement if I don't start earning on my own and investing them on insurance and other modes of investment. I was able to convince him to buy an investment with insurance which takes about 15% of his own income. I on the other hand save most of my earnings so I'm hoping we'd both have enough by the time we retire.
At least half of my monthly income from my primary job. However, I have multiple streams of income and my income from my other jobs are all put into different investment vehicles or businesses so that they can grow faster. I'm an extremely thrifty person and I love the feeling when I am able to save money so I don't encounter any problems with managing my finances. 50% for me is already more than enough and as a matter of fact, my surplus savings (savings I use for my wants), is the amount I was able to save from my 50% set aside for expenses.
I don't have a retirement plan yet. Part of the reason is that I have figured how to generate money even in old age. But I am seriously thinking about one since it confers peace of mind. I have in mind several retirement plans but life insurance is definitely out since it gobbles alot of money that could have gone to savings. Mutual funds and medium term level insurance are on my radar as my retirement savings vehicles.
The magic of compound interest is simple amazing. I wish I started putting away %5 when I started working at 15. Now I have to put away %20 just to be able to retire before 60. If anyone who is just starting to work is reading this, do yourself a huge huge favour. Put away %5 of what you earn in a cheap investment items, look up index investing for more information! Belive me, future you will be very thankful and you will never even notice that 5% missing from your pay!
I am not really sure how much if we were to pay attention to foreign exchange but based on current rates, I save around $40 each month for my future retirement. Four years ago, I purchased an endowment plan which would entitle me to approximately a few thousand dollars when I turn (in God's grace) 36. So that would be around less than 7 years more. That's the age I plan to retire from formal employment. The great thing about my plan is that the coverage expands when I marry and have kids, but the premium remains the same. Pretty neat.
The only retirement plan that I have at this moment is an insurance policy. I have an insurance policy that will mature in 25 years. By paying small premium every year, I will have have lots of money in 25 years. I am also thinking to create a 25 years fixed bank account as my retirement plan.