The cost of living continues to rise, and that means you’ll need more money for retirement. But when should you start saving, and just how much do you need?
When it comes to putting money away for retirement, experts recommend that you start saving as soon as possible.
Northwestern Mutual studied a variety of factors and found the average amount Americans believe they’ll need to retire comfortably is $1.26 million.
“There’s really no such thing as too early,” said Samuel Taube, NerdWallet investing writer and spokesperson.
Earlier this year, NerdWallet conducted a survey and found 39% of Americans said not having enough saved for retirement was a financial concern.
The most common types of retirement accounts are an IRA, which is controlled by you or a 401(k), which is sponsored by your employer and many companies will match what you put in.
“IRAs typically don’t cost anything to open. And even contributing a small amount if you’re fresh out of college and waiting tables can still make a big difference down the line,” Taube said.
Here’s how much Fidelity Investments suggests you have in savings:
By 30, you should have 1x your salary and it goes up by age.
By 6,7 you should have 10 times your salary in a retirement account.
But a lot depends on where you live and your lifestyle.
“If you’re living in a high-cost-of-living or even median cost of living area, that number may be north of a million dollars,” Taube said.
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GOBankingRates recently broke down how much you need to retire “wealthy.”
In popular retirement communities like Prescott, Arizona, you need just over $1.8 million to retire for 20 years.
In Naples, Florida, you need just under that. Other ways to grow your retirement savings is investing in the market or even cryptocurrencies.
“Once you get older and closer to retirement, the general consensus is that you’re supposed to shift your portfolio into safer assets like a heavier bond allocation in order to preserve your money against the possibility of a downturn,” Taube explained.
A financial adviser can help you reach your retirement goals.
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