Is 10% enough?

robby · #1 (**permalink**) 07-31-2005, 07:05 PM

It seems that everywhere I look, the recommendation is to save 10% of your income. My question is this really enough with longer life spans and increasing medical costs?

gavinmccallister · #2 (**permalink**) 07-31-2005, 08:59 PM

I think 10% is good, but if you can make it with saving 20% you have already doubled your savings and your interest. If you have a 401k max out your contributions to the highest that they allow, usually 20% and then if you can save 10% in savings then thats even better.

Bruce Wayne · #3 (**permalink**) 07-31-2005, 11:18 PM

Its worth remembering that with longer life span it is likely that you'll be working for longer too.

terry1156 · #4 (**permalink**) 08-01-2005, 05:01 AM

I think a lot depends on when you start saving. If you start early, then it should be plenty. If you start later, then it probably isn't enough.

BAGAGT1 · #5 (**permalink**) 08-01-2005, 05:17 AM

I agree with Terry, but it really depends on how you want to live in retirement (how much will you spend?), what your current income is? And whether you also have other forms of retirment benefits like a pension? Retirement planning is a personal thing, everybody's situtation will be different, everyone's needs will be different.

jmjj215 · #6 (**permalink**) 08-01-2005, 09:44 AM

I would like to eventually be investing half of my income and living off the other half. It will give me the retirement income I would like, plus plenty to give, and will give me the freedom to change jobs, or quit alltogether.

Fern · #7 (**permalink**) 08-01-2005, 11:38 AM

I don't think that one size fits all. It really depends, cus 10% of a $20,000 salary is a lot less money than 10% of a $75,000 salary. 10% is a good start, but it'd be better to find places in your budget to save $$ without having a preconceived perception that once you save that amount, you can "relax" and spend the rest. Set a minimum and try to do better, but don't set a maximum.

mom-from-missouri · #8 (**permalink**) 08-01-2005, 11:43 AM

Well, I look at it this way. If you only save 10%, now, that means you are living off of 90%. We don't know how long we will live, be able to work or have the ability to save. If you had something happen tomorrow, would you be able to live off of that 10% you saved today? Most of us would say no. If we are able to save more, we should. I try to save 25%. Of course, there are different ways to save it--putting it towards mortage or 401K are savings/investments. Some people don't consider that savings, but consider savings to be just an account. But, it should be a goal to pay off your home before retirement.