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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?
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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.
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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.
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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.
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References and Links:
- http://www.pentegra.com/media/26560/investstrategy_nationalsave.pdf
- http://www.nlc.org/media-center/news-search/national-save-for-retirement-week-a-time-to-focus-on-saving
- http://www.iamagazine.com/NewsViews/2012/October_18/Big-I-Retirement.aspx
- https://www.metlife.com/retirement-plan-edge/issues/2012-Q3/save-for-retirement-week.html
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