Vincenza Vicari-Bentley, AFC, Empowering Financial Wellness Program Coordinator
It’s not a big secret that most Americans aren’t saving enough for retirement. According to the National Institute on Retirement Security, more than 75% of Americans have retirement savings that fall short of what are considered “conservative” savings targets. Further, 21% aren’t saving/investing at all!
You may be thinking “how much money do I need to save/invest” and that depends largely on your goals, health, and lifestyle. Financial experts recommend that you save 15% of your income every year starting at age 25 . That would put you in a good position to retire by the age of 67.
Here's an example: If a 25-year-old started investing 15% of their average salary in Utah (49K) from age 25 to age 65 (assuming their savings/investments grow 6% over that time) they could potentially have over $1.1 million dollars saved when they retire! The contributions over the 40 years would be $288,000 but the rest of the $1.1 million total is all interest that was earned on the contributions!
Can’t afford to set aside a full 15% of income for retirement? Don’t be discouraged. Remember investing any amount for retirement positions you to benefit from compounding interest as soon as possible. Time is your most powerful ally for retirement savings. Enrolling with your employer’s retirement plan is one of the best ways to start saving for retirement. If your employer offers a match, take advantage of that! You can slowly increase your contributions so you can get the full match to maximize your savings, because that’s free money!
If your employer does not offer retirement savings options then you can open your own Individual Retirement Account (IRA) with your bank/credit union or other low-cost provider. Even if you feel like you’re behind with your retirement savings, there are always ways to catch up and save a bit more. Stashing something is always better than doing nothing!
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