VIEWS: 3 PAGES: 11 POSTED ON: 7/22/2012
Saving for Retirement Why is it important to start saving for retirement early? When saving for retirement, it's really important to start saving as soon as possible. The sooner you set up a savings plan, the more you'll have at retirement. According to InvestorGuide.com • According to the NJ Department of Health Services, the average life expectancy for a male is 75.5 years. • With the average retirement age at around 67, it is necessary for a retiree to comfortably support himself for at least 8 years. According to the Social Security Administration If you start your career right out of college, you will enter the workforce around 22. If you start saving for retirement as soon as possible that will give you around 45 years to build up a nice nest egg. If you start out with a salary of $45,000, in 45 years you will be making approximately $170,000. Based on an average inflation rate of 3% annually, according to the US Census Bureau According to Investopedia.com, a retired individual may need as much as 70% of his pre-retirement income to live comfortably. Amount of money you will have saved at retirement if you wait. $1,200,000.00 $1,000,000.00 Savings $800,000.00 $600,000.00 $400,000.00 $200,000.00 $0.00 0 15 25 Years Based on an annual contribution of $5000 into a tax-deferred investment plan with 6% interest. How much you will recieve annually after retirement, based on how long you wait to start investing. 200000 150000 Annuity 100000 50000 0 0 15 25 Years Waited Based on an annual pre-retirement investment of $5000 and collecting for 8 years past retirement. • If you start saving immediately, you can live your post-retirement years close to 100% of your pre-retirement income. • If you wait 10 years, it drops to 52.8%. • If you wait 15 years, it drops to 37.4%. • If you wait 20 years, it drops to 26%. • If you wait 25 years, it drops to 17.4%. Therefore it is very important to start saving for retirement as soon as possible, to ensure that you will be able to retire comfortably.
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