It can often feel like the word "retirement" isn’t even in the vocabulary of most millennials. The so-called "me" generation has been defined by its succeed-at-all-costs mentality, so the idea of ridging off into the sunset and embracing a life of leisure seems far-fetched.
But if millennials do want a comfortable retirement, Tom Anderson of Forbes notes that most financial advisors recommend people save up to $1 million.
Most Americans, however, don’t come close to that number, as the average retirement savings ranges from $104,000 to $148,000, depending on the age average of the household.
While advisors recommend retiring with an investment portfolio that generates 80% of your annual income, Morningstar Investment Management found that there is no right one number that works for everyone. “The true cost of retirement is highly personalized based on each household’s unique facts and circumstances,” the group says.
Truthfully, the amount you should save for retirement depends on what kind of life you plan on laving. If you the French Riviera is in your future, obviously you’re going to need to save a little more. But, if watching your grandchildren play Wiffle ball in the yard is enough to keep you satisfied, then saving the right amount shouldn’t be a problem.
Once if you’ve estimated how much you’ll need to actualize your ideal retirement, you can begin developing a financial plan, which means determining how much you want to save and how you plan on saving it.
Greg Ostrowski, a certified financial planner for Scarborough Capital Management in Annapolis, Maryland, recommends putting away 15% of your income, or starting where you feel most comfortable and increasing that rate steadily.
Anderson’s report also suggests reducing your expenses, especially when it comes to debt, in order to make your retirement goals more feasible.
Like everything that’s difficult in life, the trick is just getting started.
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