Tips on Saving for Retirement

Last updated on May 28, 2023

When saving for retirement, you first must determine how much will be enough for you to continue your present lifestyle after retirement. This may be difficult because many factors will have changed by the time you reach retirement age, including the tax rate. Even though we cannot be absolutely sure of the figure that will help us to meet our needs, we can try to make a close estimation.

To determine how much will be enough for your retirement, you must determine your net worth. The net worth is the total value of your assets minus the value of your total debts. After you have determined your net worth, you need to either make efforts to increase your net worth (if it is negative or insufficient) so that you can save enough for your retirement, or discover the best methods to save for retirement (if your net worth is satisfactory).

Experts believe that you would need 80 percent of your present income to support you in retirement if you continue with your present lifestyle. When determining how much you will need in retirement, also consider the liabilities that you have at present and that won’t be there in the future. At the same time, also consider the new liabilities that you might need to shoulder after retirement. You should begin making contributions to your retirement account accordingly.

When saving for your retirement, it is best to begin early and make as much in monthly payments as you can. Treat your monthly retirement funding as an expense. Even if you have not calculated the funds you will need after retirement, keep saving as much as you can for your retirement to stay secure in old age.