Preparing for retirement

Retirement may be a long way off, but it is never too early to plan for it.

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As a rule of thumb, you will need about 80% of your pre-retirement salary in retirement. A more precise number will depend on your specific plans for retirement—where you will live, what you will do, and so on.

As with anything, the sooner you start saving for retirement, the better off you will be.

  • How much
    Experts suggest you save 10% percent of your income each year from your 20s to your 40s, and then double that in your 50s and 60s.
  • Advice
    Seek advice on your retirement investment strategy. If you can earn a higher return, you can reduce your savings rate or retire earlier. Nevertheless, higher returns carry higher risk.
  • Employer retirement plan
    If your company offers a retirement plan, enroll. Automatic deductions make savings easier for most people. In addition, if your employer offers matching contributions, try making the maximum matched contribution.
  • Individual Retirement Accounts (IRAs)
    Max out your ability to open more Individual Retirement Accounts (IRAs)—e.g., on behalf of your spouse.


Look for other amounts to save. Directing "found" money such as raises, bonuses, and tax refunds into your savings can feel less like a sacrifice. If a spouse starts working, save some or all of that income. Most people have far more control over how much they save than over how much they earn on investments.

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