Saving Rates needed for Individuals
I came across this article from my insurance company today that has tables and graphs the percentage of income that should be saved based on your age and approximate annual income.
The tables don’t cover all income levels and don’t address income increases over the years.
Many financial planners use 80% of your income as the target for retirement needs. People that plan to travel will need more. Quick summary for 80% replacement:
| Age | Income | Savings Rate |
| 25 | $40K | 10.0% |
| 30 | $60K | 12.8% |
| 35 | $60K | 19.6% |
| 40 | $80K | 29.0% |
| 45 | $100K | 42.8% |
| 50 | $100K | 61.0% |
| 55 | $100K | 97.0% |
| 60 | $100K | 150% |
Basically, if you haven’t started saving 20% of your income by age 35, then you are in BIG trouble!!! Plan on working until you’re dead, since kids and mortgages will prevent you from saving what is needed.
Table 3 in the article has the Assets Needed when you’re 65 to provide 80% cash flow. The table is in todays dollars and it assumes Social Security is paid and it is only for 1 person.
I’m worried that I over simplified this article, so take 10 minutes to read it.
