- Save at least 15% of your income annually for retirement each year from age 25 to age 67. The key word here is at least. If you haven’t already read my “Maximize 401k” article, then please do so now. I would love for folks to contribute the maximum amount possible as early in life as possible, but completely understand sometimes it is very difficult to set aside this amount for retirement.
- The single most important concept you should get from this article is to start saving early for “retirement” (whether that means to you retiring at 65, 50, etc.) Time, depending on your age, may or may not be on your side. The earlier you start, the more time you have for your investments to grow and recover from market downturns or recessions.
- To put things in perspective (because I know there will be many people who will bring up all the reasons why they can’t put aside 10%, 15%), someone once asked me early in my career if I could save 10% of my income and I said no because I thought it was a lot of money and I clearly did not mentally calculate what 10% actually translated to ;). Then the same person asked me if I could live on 90% of my income, to which I eagerly answered “of course”! So clearly if I could live on 90% of my income, saving 10-15% for retirement should be a no-brainer.
Saving is in part psychological. We have to shift gears and just do it. Today.