By Terry Orr
Did you know that to live comfortably during retirement you will need from 80 percent to 100 percent of your pre-retirement income?
Your defined benefit or defined contribution plan and Social Security are a foundation. But you will need savings to fulfill your retirement dreams.
The U.S. Congress thinks it's so important that Americans reflect on their personal retirement goals - and determine if they're on target to reach those goals - that the lawmakers designate one week in October to focus on the issues.
Goals for National Save for Retirement Week:
- Make employees more aware of how critical it is to save now for their financial future;
- Promote the benefits of getting started saving for retirement today; and
- Encourage employees to take full advantage of their employer-sponsored plans by increasing their contributions.
Saving is The Key
- Nest eggs require many years to build;
- People are living longer: retirement can now last 20 – 30 years;
- Many employers will provide a match for your retirement contribution to help motivate you to contribute; and
- Saver’s Credit. For those with limited income, saving can be especially hard. The government has a special Saver’s Credit just for those individuals. If you are eligible, you can actually receive some of your contribution money back when you file your tax return.
How much should you save? – Here are guidelines provided by the National Association of Government Defined Contribution Administrators (NAGDCA):
- In your 20’s, save 7% of you salary;
- In your 30’s, save 10% of your salary;
- In your 40’s, save 15% of your salary; and
- In your 50’s, save 20% of your salary.
References and Links: