I was studying for my upcoming CFP(R) exam last night and came across an interesting table that showed what percentage of a person’s gross income they’d need to save in order to create enough savings to provide enough income for their retirement years. Keep in mind that these are just general estimates and each individual should contact a financial planner to have them do the math for their specific situation.
If a retirement saver begins at age 25-35 and saves regularly until retirement they’d need to set aside 10-13% of their gross income.
If a person delays a regular retirement savings plan until they reach the ages of 35-45 they’d have to set aside 13-20% of their gross income.
If a person waits until they are 45-55 they must save 20-40% of their income AND may have to delay retirement until the age of 70.
Let compound interest do the work for you!