Being able to enjoy peace of mind after years of work is everyone's dream. But To have a decent retirement it is necessary to plan ahead. For 74 percent of Americans, the ideal age to stop working is 64. However, if they want to achieve it, they will need to save a certain amount each month constantly, otherwise they will not achieve it.
A report from New York Life financial company Wealth Watch found that two-thirds of adults in the United States feel confident in their ability to achieve their financial goals. However, he discovered that Only 41 percent of respondents currently have money saved for retirement, Furthermore, less than that amount has any plans for their future.
Considering that the average person will need about $1.3 million to retire and have a comfortable lifestyle, according to Northwestern Mutual's Planning and Progress study, It is necessary for people to get to work and start managing their money better to be able to face their future without income from work.
Based on the previous panorama, the medium CNBC calculation How much money an American would need to save each month to retire at age 64 with more than a million dollars in your savings account. They clarified that their exercise assumes an initial balance of 0 and ages to start saving of 21, 25 and 30 years.
They also cautioned that their analysis does not take into account both common and unpredictable life events including layoffs, promotions or market volatility. Likewise, they detailed that, considering that Experts recommend saving 15 percent of annual income for retirement, The income to be taken into account was calculated based on this.
How much money should an American save for retirement if they start at age 21?
The exercise of CNBC indicates that If an American wants to retire at age 64 and starts saving at age 21, these are the figures they should take into account:
To earn a 5 percent annual rate of return, equivalent to $715 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$98,970.
- Annual salary needed to save 15 percent of income: US$65,983.
To earn a 7 percent annual rate of return, equivalent to $397 per month, you need the following income:
- Annual salary needed to save 10 percent of income: US$54,943.
- Annual salary needed to save 15 percent of income: US$36,630
To earn a 9 percent annual rate of return, equivalent to $211 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$29,186
- Annual salary needed to save 15 percent of income: US$19,458
Saving is a long-term investment for retirement.
How much money should an American save for retirement if they start at age 25?
To earn a 5 percent annual rate of return, equivalent to $903 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$124,944
- Annual salary needed to save 15 percent of income: US$83,334
To earn a 7 percent annual rate of return, equivalent to $534 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$73,883
- Annual salary needed to save 15 percent of income: US$49,257
To earn a 9 percent annual rate of return, equivalent to $305 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$42,170
- Annual salary needed to save 15 percent of income: US$28,115
How much money should an American save for retirement if they start at age 30?
To earn a 5 percent annual rate of return, equivalent to $1,216 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$168,363
- Annual salary needed to save 15 percent of income: US$112,248
To earn a 7 percent annual rate of return, equivalent to $779 per month, you need the following income:
- Annual salary needed to save 10 percent of income: US$107,909
- Annual salary needed to save 15 percent of income: US$71,943
To earn a 9 percent annual rate of return, equivalent to $485 per month, the following income is needed:
- Annual salary needed to save 10 percent of income: US$67,213
- Annual salary needed to save 15 percent of income: US$44,811
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