You can get to the edge yourself. If you’re in your 20s or 30s, you can work at a regular job and still have a lot left over to save for retirement. You also can have money from investing in a stock market index fund, or from earning extra money from working. Don’t make the mistake of thinking that if you set aside 20% of your paycheck to pay off credit card debt or the student loans you owe, then you don’t need to save for retirement.
You can also go it alone on savings. You’ll need to set aside a minimum amount each month. There aren’t strict rules of what you can do with it, or what your monthly budget should look like. Some people like to split that money between a 401(k) and an IRA, while others decide to simply save the extra money one month every year for future emergencies.
If you do decide to have your money pooled together for retirement, make sure one person is responsible for each dollar in savings for three years.
I want to know how much money I’ll need to save through retirement
Before you start saving for your retirement, you’ll have to know how much money you’ll need. Here’s how to do that:
In your first full year at your new paycheck, you should subtract your previous year’s income (which should be less than 50% of your final salary). You just calculated your income for the year at $35,000. So this next year, say you make $30,000 a year less than the $35,000 you earned in your first year, but you want your income to go up to $40,000. Divide that number by three. That means you’re still about $200,000 short of what you need to save for retirement. Now divide this number by the amount of your monthly pay. That means to save up another $200,000 you’ll have to earn a little more than $40,000 every three months just to reach the $400,000 total amount you need to start saving for retirement. So to begin saving for retirement, you should work for 30 months out of every year.
Once you know how much you’ll need to save for retirement, get some advice from your financial advisor. You may have a few different goals, or goals that can be accomplished over the next few years.
Is there any way I can increase my retirement savings?
There’s no way to increase your retirement savings
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