Necessity of savings for retirement, and the amount we should save
Planning your retirement is important regardless of the stage of life where you are. For young professionals, in their 20s and 30s, retirement seems far away. However, the sooner you start saving for retirement, it is more likely to have savings to enjoy the carefree retirement years. Develop a good budget and saving habits now in youth is the first step toward financial security when you retire.
Why does a person need to Save For Retirement?
So, why should we think of start saving for retirement now? Suppose, you retire in your 65 and saved nothing or little. Now where do you see your life? If you live with your son/daughter, you will be dependent on them for each and everything, and if you live alone, then you should be ready to see the worst part of your life.
The numbers are clear: if you start saving between 10 to 15 percent of the salary each year from your 20, then you should be able to maintain the same level of retirement savings for the rest of your working years, because you will get the habit and there will be mindset that you have to save that much. However, if you wait for your 40 to start saving, the numbers won’t be so nice. The later you start saving, the more you need to cut from your salary, and you will have to force yourself to save between 25 to 45 percent of your salary to generate enough to enjoy the retirement years without problems. Save yourself from unnecessary hurdle, and start saving from the first month of your earning.
How Much Should I Save for retirement?
Who can answer the question better than you? Your savings plan depends on your personal needs, but a good rule is needed to start setting your retirement goals. Start with small by establishing a direct deposit from your paycheck into your savings account or create an automatic transfer from your checking account to your savings account each month. Your employer also provides some benefits, and you need to find out whatever benefit your company provides, and take the advantage of those.