Those planning to save for retirement will eventually think about the following questions.
How much should you save for retirement?
As this article will soon show, the answer to that question is not straightforward. The good news is that he’s one step ahead of most Americans who are saving for their retirement dreams if you consider these five factors:
Let’s start with the first element…
#1 – Retirement Savings Rules Are Unsettled
If you’ve ever searched online for retirement savings advice, you’ve come across common “rules” offered by various experts.
For example, Fidelity has General rule of thumb Here are the estimated retirement savings:
Aim for at least the following savings:
Double your salary by 30
3x x 40
6x x 50
and 10x at 67
At least that’s the starting point – but it tells us ikura instead of saving how save.
Typical how much proposal The salaries you should be saving from your 20s are as follows:
Proposed by Fidelity Investments Save 15% of your gross salary Start in your 20s and continue until you become a member of society.
Another, more heuristic formula holds that you should save 25% of your gross salary each year, let’s start in the twenties. The 25% savings number may sound daunting. But remember, this includes not only his 401(k) holdings and matching contributions from his employer, but also other types of retirement savings.
Again, I’m fine with that guidance as long as I can keep pace. For most people, reality comes into the equation and can’t keep up.
of Consequences of Inadequate Savings Like inflation, it is cumulative. The further back you are, the more you have to catch up.
Not everyone can start saving at age 25 or continue to save 15% of their salary for retirement. If you start later in life or have a little less savings, you may need to work longer, cut more expenses, or put more money into retirement. To compensate for the reduction in time and compound interest.
This is why there are no clear retirement savings guidelines. Everyday life is different for everyone, and our challenges are as unique as our hopes and dreams. Let’s make a plan according to the situation!
And remember your plans need to be flexible…
#2 – You need to adapt your plan as circumstances change
“Man makes plans, and God laughs.”
We must remember to be flexible life happens:
Whether you try to follow the 15% or 25% savings guideline, your actual ability to save may be impacted by life events such as job loss that many experienced during the COVID-19 pandemic. there is.
Employment, health and income can change throughout life. Sometimes for the better, sometimes for the worse. Any major changes in your circumstances should be reflected in your retirement savings plan.
But we should not limit our thinking to what is happening now. right now. We must also think about the future.
The lifestyle you want to have after retirement should reflect not only your aspirations but also your reality.That usually means considering Both expenses and discretionary spending:
In other words, do you think you will spend less What if I retire? We call it a below average lifestyle.
Or do you? spend as much money as you do now?That’s average.?
If you expect to spend more than you do now, you’re above average.
Nobody Wants a ‘Below Average Lifestyle’, But What Does It Take? today to get there sometimes?
This is the equation we have to solve, not just once, but regularly…
#3 – Review Plans and Track Progress
Change is the only constant.
Life events, for better or worse, cost us time and money. That’s why you should review your retirement plan frequently, track your progress against your goals, and Make any necessary changes.
The last part is important. It is not enough to know that you are off track. do something for it.
If you’re not on track to reach your goals, here are some recent achievements Expert suggestions:
If you don’t think you’ll have the cash flow you need to retire comfortably, there are ways to increase your account balance.
“One of the best ways is to make more money,” says Betterment investment researcher Ben Bakum. That might mean looking for a higher paying job, getting extra hours, or starting a side business.
Another way to increase your savings is to By cutting spending. Em-Powered Network CEO Vanessa N. Martinez said: 50/30/20 budgeting system Spend 50% of your income on necessities, 30% on necessities, and 20% on savings. For those on a tight budget, she points out. Many people spend money on things they don’t necessarily wantforgotten subscriptions, etc.
Two things are important to solve the budget shortfall:
- increase income
- reduce spending
(Congress, are you reading this?)
Put extra money into your IRA or emergency fund each month to further protect your retirement savings.
that’s wise. “When life happens,” an emergency fund can make or break your financial plan. Sometimes you can’t plan specifically, so you need to plan holistically.
Kind of like an emergency. and the effects of inflation.
#4 – Spending Power Decreases Over Time
We talk about this a lot, and it’s important. If you do everything right, hopefully your savings account balance will grow over time. Part of that growth is Declining purchasing power of the dollar.
Imagine for a moment that you made a retirement plan in 2014 and predicted that you would need $1.5 million for your dream retirement. today?
according to Bureau of Labor Statistics CPI Inflation Calculator, Today’s dollar equivalent is $1,950,232.
that is 30% increase in the required number of dollars same lifestyle you plannedof less than 10 years.
This is the main reason why it is important to reassess the plan periodically (at least once every ten years).
you can’t think in terms of a particular point of view Dollar “Magic Number”, then your dream retirement is guaranteed. Yesterday’s “plenty” may well be today’s “minimum” and tomorrow’s “lack”.
In other words, it is virtually impossible to plan tomorrow’s expenses of Today’s dollar.
But don’t give up! Inflation will be a problem, but solutions are possible.
#5 – Diversification helps
This is one of the strategies as important as considering changes in the value of assets. retirement plan is showing an effect diversification strategy.
Effective diversification reduces volatility due to economic conditions. Ideally, savings include economically sensitive assets that increase during good times and “counter-cyclical” assets that increase during downturns.
that’s the cause physical precious metals A good asset to consider. metal Like gold and silver, they are tangible and finite resources that have had an inherent value for thousands of years. They are not controlled by central banks or governments. The Fed cannot “print” them.
Gold in particular tends to retain its value Even in the worst economic times. That alone makes it a very valuable asset for diversification purposes.
diversify with physical precious metals, gold and silver alike also help us look beyond the numbers and focus on preserving our purchasing power. Possession of physical gold is no longer just for the ultra-rich. everyone.
Are physical precious metals right for you? The good news is that you can get all the information about them for free here.
peter reagan is a financial markets strategist at birch gold group. As a precious metals IRA specialist, Birch Gold helps Americans protect their retirement savings with physical gold and silver. Based in the Los Angeles area, the company has been in business since his 2003 and has an A+ rating.