How Much Should I Save for Retirement

Saving for retirement is not as difficult as it seems. How much you can set aside depends on your income and your spending habits. Here are some suggestions on how to put aside money.

Save Early

Don’t wait until you’re financially stable to save money. The time to do it is when you start earning. No matter how much you’re making, try to set aside about 10%. If you can keep yourself from spending more, that’s even better.

Next, put the money you save in an account. It can be a 401k or one of the many IRA accounts. If you want to put the money in a time deposit, that’s a good idea too. The point is that these accounts will let your money grow over time. When saving for retirement, try to do it as early as you can.

Not only will these accounts generate interest, but you’ll likely get pay increases at work. This will allow you to set aside more money.

Investing in the Stock Market

The returns from IRA and 401k can’t compare with what you can get from the stock market. The forex market also has high yields. However, there are some risks here. You only need to watch the news to see how volatile the market is.

Here are a few general guidelines; if you’re investing in the stock market, pick stable and reliable companies. The returns won’t be much in the short term, but in the long run the benefits will be bigger.

If you’re saving for retirement, you might be tempted by the larger yields in these markets. But if you can’t stomach its roller coaster nature, 401k and IRA are better and safer alternatives.

Health Insurance

This might take up some of your salary, but it’s indispensable if you’re frequently sick. If you have a family history of heart attacks for example, medical insurance is a must.

At the same time, do yourself a favor and eat right. This won’t just keep you safe from diseases. If you cut down on candies, cakes and junk food you’ll save even more money.

Spend Money Wisely

Saving for retirement isn’t just about putting money in the bank. It’s also about spending properly. Learn to distinguish between your needs and wants. Do you really need the latest cell phone? Is upgrading that computer necessary? Is replacing your wardrobe every few months necessary?

Spending wisely means buying things that will last. It also signifies accounting for all your expenses. You’re not being a miser; you’re just being sensible. You will never be able to save money if you don’t know how and where you’re spending it on.

There are plenty of applications that will help you manage these figures. Actually a simple calculator will do just fine. Going through this exercise will show you how much you are spending and how much you can save.

When it comes to saving for retirement, planning now is mandatory. It doesn’t matter how much or little you’re able to save. What matters is that you’re setting aside money now.