Retirement Savings: How much?!?

If you Google “How much should I save for my retirement?” underneath all the advertisements for financial institutions you will get consistent results of “15% of your pre-tax income.” Great advice, but at what point in your life are you when you ask that question? Would the answer be the same if you are 25 years old or 50 years old?Obviously, the answer would vary greatly based on your age and how much savings you’ve managed to achieve. So, let’s do a quick breakdown. If you are 30 years old, you should have 1x your salary banked for retirement. This includes 401k’s, IRA’s, 403b’s, etc. (listen to my Account Funding Priority podcast for more on where the money should be invested). So, if you make $50k/year when you’re 30, you should have $50k in retirement savings. As you age, here are the multiples of your salary you should have saved:Age 35: 2x Age 40: 4x Age 45: 6x Age 50: 9x Age 55: 12x Age 60: 17xAge 65: 23xPanicking because you just did some quick math and realized that if you are making $150k by the time you are 60, you should have $2.5 million saved? Relax, your money will be working hard for you at that point.You’ve heard of Warren Buffet, right? His net worth is over $102 billion. Did you know that 99.7% of his wealth was earned after his 52nd birthday? That’s because compounding works wonders for your retirement savings in those later years.Here’s how you can make sure you live comfortably in retirement and take advantage of compounding interest:First, look at what you’ve saved and check the age chart above to see if you are where you need to be. Start saving now. Just as Google suggested, put away 15% of your pre-tax income. Are you behind where you need to be? You have options:Save more - Put a higher amount into your retirement accounts than the recommended 15%.Spend less - Need help trimming the fat from your budget? Listen to Wait a Week for tips on not spending.Work longer - No one said you have to retire at 65. There are many benefits to delaying retirement, including significantly increased Social Security payments.Automate your savings so you live off what is left in your paycheck AFTER you’ve saved. Listen to my two-part series on automation.It’s never too early or too late to begin planning for retirement (ok, it might be too late if you are already 65!). Check out the resources below for more information on saving for your future.https://www.marottaonmoney.com/how-much-should-i-have-saved-toward-retirement/https://mortonfinancialadvice.com/captivate-podcast/which-account-do-i-use-first/https://mortonfinancialadvice.com/captivate-podcast/set-up-automatic-savings/https://www.cnbc.com/2020/09/08/billionaire-warren-buffett-most-overlooked-fact-about-how-he-got-so-rich.htmlLearn more about Mike and my services at https://www.mortonfinancialadvice.com and connect at https://www.linkedin.com/in/mwsmorton/