What % to Save

Q - Advice I find on the internet suggests I should save 15% for retirement, but there is no way I can even save 5%. Given my career field, I’ll never get to 15%. Any options for me?

A - To be blunt, that 15% goal is most often coming from someone who benefits from people with large amounts of retirement savings; financial service providers, investment book sellers, and financial planners. The more money you accumulate in retirement accounts the more someone else wants a piece of it. Ok, I’ll step off my soapbox. Many can retire quite well saving much less, if, and this is a big if, they start early, invest correctly, and don’t try to retire at 55. Saving 15% (or more) might be necessary for some in their 40’s with little saved, or got use to a larger lifestyle and need the savings to continue that lifestyle. But you really can’t know if 15%, 12%, or 8% is the right percentage until run your numbers through a retirement planning tool that considers you current age, income, savings, and lifestyle. The other key point is to not assume 5% is bad. It’s just a starting point. Saving 5% is 5% more than 0%. So, do the work to get it to 7% next year and 10% in 5 years by working your budget to support the 7% and then the 10%. But if you don’t do the work on your retirement plan, you’ll never know how much you really need to save.