How can you improve your chance for a succesful retirement?
Retirement Calculator
“one of the best things you can do to improve your chances at a successful retirement is to use a free online retirement calculator”
via: http://www.fool.com/retirement/general/2013/05/18/1-simple-step-to-dramatically-improve-your-retirem.aspx
Save 20%
Wade Pfau, professor of retirement income at the American College, which trains financial planners, has crunched the numbers to find a safe level of saving that would have worked in every historical market stretch going back to periods beginning in the 19th century.
He found that setting aside 16.6% of income and putting it in a diversified portfolio of [60%] stocks and [40%] bonds did the trick every time. (Good news: Employer matches count toward that savings rate.) That’s if you’re consistent about saving over 30 years.
A slow starter must ramp up higher — a 45-year-old with two times salary saved would have to go for 20%.
Let’s just say for a 40 year old who has no savings.
As I look at this chart, If this 40 year old wants 70% of his or her Final Salary, this person would have 30 more years to work & save (accumulation phase) (retire at 70), and expect to live 30 more years in retirement (retirement phase) (die at 100), then this 40 year old must save: 23.27% consistently for the next 30 years (this savings rate includes any employer matches). They would then invest this savings 60% in stocks & 40% in bonds. When they retire, this person would then be able to take 70% of the final salary out of their savings every year.
The key to retirement savings: in your best Dory voice: just keep saving, just keep saving, just keep saving, save at least 20%!
Read this far? then please share:
Like this:
Like Loading...
