If you’re able to put 10% of your salary away each year, that may seem pretty good. But it may not be enough. It’s a common rule of thumb, but it doesn’t account for emergencies or even lost income. And real life isn’t dictated by formulas. So how much should you save? You could use an online tool such as the Retirement Planner cgi.money.cnn.com/tools/retirementplanner/retirementplanner.jsp), which offers a sophisticated analysis of what you need to save to retire comfortably. It always makes sense to do that, but you’re still getting only an estimate. It’s no secret that the earlier you start he better off you are. But to put that in real terms, say you’re 50 years old and you make $80,000. If you haven’t saved anything, you’d need to put 30% a year away to wind up with 80% of your pre-retirement income (a comfortable range). On the other hand, if you’ve been able to put $300,000 in savings by age 50, you need only put 15% away annually. Again, these figures are only estimates. You may be able to retire comfortably while saving less if you’re among the 20% of workers who have a pension, you plan on working part-time in retirement or you’ll be tapping the equity in your home through a reverse mortgage. In any case, the 10% rule just isn’t enough.
Sources: “Why the 10% Solution Is Actually 90% Wrong,” The Money
Salem Five Resource
Navigating the Wealth Building Maze
Once your business begins to generate cash over and above that needed for funding ongoing operations, you’re faced with a host of new questions and options: Should you increase contributions to a company 401(k) plan? Consider a defined benefit plan to shelter even more cash from taxes? Buy real estate for your business? Invest the cash in stocks and bonds or a tax-advantaged tools? The questions go on and on…
At Salem Five Investment Services, we’re committed to an advisory approach to private wealth management founded on clearly understanding your financial position and goals for the future. The financial professionals at Salem Five provide independent guidance utilizing a broad array of non-proprietary financial products and services, including:
- Stocks and Bonds
- Mutual Funds
- Variable and Fixed Annuities
- Tax-Advantaged Investing
- Retirement Planning
- Portfolio Analysis
- Long-Term Care
Your financial health is our sole focus at Salem Five Investment Services. If you’re asking yourself questions like those above, and you’re interested in some answers, please contact me, Sean Tesoro, Managing Director, Salem Five Investment Services, at 978-720-5219 or by e-mail email@example.com.