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Retirement Saving Tips You Should Consider
Planning for your retirement is an important financial decision that you should make early enough. Once you retire, you might not have a reliable source of income, and the only means of survival is your life savings. Therefore, when you still have a job, you should not spend everything on mortgage and lifestyle. From every salary that you receive, you should save part of it. How should you save for your retirement? Many people find it hard to decide on the right amount that they should save towards retirement. If you are wondering how much of your income you should save, then you are on the right page. Read on to learn the amount that you should save for your retirement.
One of the saving rules that you should consider is the 15% rule. This rule requires one to save up to 15% of their pre-tax salary for retirement. This is a suitable rule for saving for retirement, but you should know that it has its drawbacks. With this saving plan, you will be required to start saving at an early age. The key to ensuring that you have enough to spend during retirement is starting to save before you hit 35. Fluctuation of income is not usually taken into consideration when it comes to this saving plan. click on this site to learn some of the drawbacks associated with this rule of saving for retirement.
80% rule is the next saving plan that you should consider for your retirement. 80% saving rule means that your savings should be enough for you to draw 80% of your salary at the end of your final salary. One of the reasons why people avoid this saving plan is that it does not take into account other sources of income except salary. click here to learn more about the 80% rule of saving for retirement.
4% rule is the other saving plan that can suit you. 4% saving rule works towards attaining the 80% saving rule. Most people usually find it hard to generate the right amount to save. A financial advisor is the right expert to consult with if you don’t want to mess when using this saving formula. Based on your income, a financial advisor will find the best saving formula. On this website, you will learn how to identify a good financial advisor to help with your retirement planning.
If you don’t like working with the percentages, you should salary multiples as a saving formula. Salary multiple is a simple rule that states that you should have saved twice your annual salary by the time you are 40, four times your annual salary by the time you are 50, and six times your annual salary by the time you are 60, and the sequence continues. Therefore, if you are wondering how you can save for retirement, you should consider the above-discussed rules now!