Many are not in a position to save. I get it. We are, after all, living in an economy that has been circling the drain for almost 50 years.
Still, if feasible, be kind to your future self and stash away as much as you can.
It’s possible social security will be slashed. It’s possible the eligibility age could be pushed to 80 years old. It could very well disappear all together. Living costs will continue to rise. Taxes will continue to rise. Employer 401(K) contributions will continue to shrink. It could get really, really ugly.
Most financial experts recommend saving 20 to 25 percent of your income. But I’m not messing around: me and my wife are trying to save just shy of 40 percent.
Here’s the breakdown:
-18 percent of my wife’s compensation goes into a pension
-50 percent of my salary (the maximum amount allowable by law) goes into a 401(K), which obviously maxes out my employer’s match
-We max out both of our IRAs/Roth IRAs every year
In addition, I use round-ups through Acorns. Let’s say I charge $1.50 to my cash-back card. This is rounded up to $2, and the 50 cents goes into various stock and real estate investments. I also fund this Acorns account with money I make from cash-back apps like Ibotta, Hog Receipt, and Fetch. I also make extra money through Swagbucks. It all goes into the retirement pot.
Bottom line: I want to save at least $5 million for retirement. This is based upon a conservative 6.5 percent rate of return spread across 30 years. I’m assuming me and my wife may live to 95. This would give us approximately $167,000 a year.
Anyway, this is my goal. It will be reached.
P.S. Saving this much slashes your taxes. Big time.
Frugal Tip: We are part of a Buy Nothing group in our neighborhood. We’ve got tons of great stuff (worth hundreds of dollars) in the past two months alone for nothing!
The Frugal Fight 