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What Percentage of My Salary Should I Save for Retirement?

Many Americans wonder, “What percentage of my salary should I save for retirement?” as they look ahead to the future. Retirement planning can be challenging but it is important to ensure you’re saving enough for a comfortable life in your golden years.  These tips will help you plan for your retirement.

Retirement Planning Overview

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While people are saving for retirement at higher rates than 10 years ago, it can be hard to know if you’re saving enough money to ensure a comfortable retirement.

An analysis by the federal government in 2015 found that Americans’ retirement planning varies widely and many people having little to no retirement savings at all.

You can’t afford to put off saving for retirement even if your budget is tight. While Social Security may provide you with some income, it will likely not be enough to comfortably cover your living expenses.

If you’re wondering, “What percentage of my salary should I save for retirement?”, we’ll help you come up with a plan.

1. How Much Money Will I Need in Retirement?

Experts often cite the “80 percent rule” of retirement planning which says that you should plan to live on 80 percent of your pre-retirement income. But your finances may be different than the average retiree.

Get a better estimation of your needs by answering the following questions:

Keep in mind that unpredictable factors such as the economy and medical costs will also affect your retirement expenses.

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2. What Percentage of My Salary Should I Save for Retirement?

Many financial advisors suggest you should save 10-15 percent of your gross income for retirement starting in your 20s. That’s in addition to money that you may be setting aside for short-term goals such as a new car and emergencies.

Online retirement calculators can help you determine if you’re on track to meet your financial goals.

3. What Savings Options Do I Have?

Now that you know the percentage of your salary you’ll need save for retirement, how can you make the most of your funds?

Contributing to your employer’s 401(k) plan or other savings products such as Individual Retirement Accounts (IRAs) can turn your regular contributions into a reliable source of income in retirement. Many retirement savings plans also reduce your taxable income so you’ll get to keep more of what you earn today.

Synchrony Bank offers a variety of savings products that can help you start a retirement fund or catch up. We have several savings account types that can help you meet your retirement goals, including IRAs. Remember to consult your financial or tax advisor before contributing to an IRA.

Call 1-844-345-5789 today for help with your retirement savings goals.

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Sources:

NerdWallet: https://www.nerdwallet.com/blog/investing/how-much-to-save-for-retirement/

CNN Money: http://money.cnn.com/retirement/guide/basics_basics.moneymag/index7.htm

CNN Money: http://money.cnn.com/retirement/guide/IRA_Basics.moneymag/

CNN Money: http://money.cnn.com/calculator/retirement/retirement-need/

GAO: https://www.gao.gov/products/GAO-15-419

IRS: https://www.irs.gov/retirement-plans/401k-plans


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