How Much to Save For Your Future for Real Results
Early in the year, many of us like to set or reset certain goals and objectives we have. A question many ask themselves is “How much should I save for my future?” The answer? It depends. Factors like your age, job situation, life and legacy goals and more are all crucial in determining where you want to be financially when you retire.
There are many ways you can start to identify how much you should save for your future including detailed cash flow analyses, savings ratios, back of the envelope calculations, etc. These are all good tools, but the most important tool of all is yourself. Where do you want to be when you retire? Do you want to live a lavish lifestyle? Do you want to contribute to charities? Do you want to leave money behind to your children? All of these goals are achievable, but there is some work on your end to make them happen. Here are a few things you can do to get started:
- Write down what you want your retirement to look like. Having more than one goal can always be good in case something doesn’t work out the way you thought it would.
- Contribute the max match amount to your employer sponsored plan. Remember, any employer match is essentially free money. (if applicable; see chart)
- How do you know how much you should save if you don’t know what you are spending? Reviewing a detailed cash flow analysis, which would identify your inflow and outflows can be very helpful to identify this.
*Past performance is no guarantee of future results. Assumes reinvestment of income and no transaction costs or taxes. This is for illustrative purposes only and not indicative of any investment. An investment cannot be made directly in an index. © Morningstar. All Rights Reserved.
Employer Match Example:
— Hypothetical value of $100 invested each month from 1996-2015
— The light blue line represents the growth of $100 invested in stocks at the end of each month. The dark blue line represents the same investment with a 50% employer match. Thus, $150 is invested in stocks at the end of each month.
— By taking advantage of the employer matching program, the employee gained an additional $26,000 over the 20-year period analyzed.
The question “How much should I be saving?” all depends on your particular situation and your overall end goals to save for your future. Most importantly, make sure you are saving in some way. Finding what works best for you and having a good game plan early with periodic check in’s is crucial in this process. Any approach is better than none. Meeting with a FIDUCIARY financial adviser can help jump start this process and identify a personalized path of how to reach your goals so find a financial adviser near you. The Payne Wealth Partners professional team is dedicated to sharing knowledge of how to accomplish financial goals that is aligned with the overall values of your life and legacy.
Our Indiana fiduciary adviser firm is dedicated to providing transparency, clarity and confidence to our clients so they can lead their best lives and leave powerful legacies. We’d be honored and privileged to start a conversation today to provide the same to you.
To speak about your personal situation you may contact me directly at 812-602-6300 or via email at firstname.lastname@example.org. Alternatively you may just wish to visit our website at www.paynewealthpartners.com.
Date Published: March 1, 2017
Authored By: Christian Tant
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