If you are in your 20’s, chances are you are most likely not thinking about retirement or financial stability. While it may be very difficult to shift focus on future financial planning, the sooner you begin to take small steps in this direction, the more secure and stable your future will be. Get a good start with these very easy and smart planning tips. The Value of Starting to Save NOW! It is important to realize the value that comes with saving money early on in life. There is a certain amount of discipline that comes into play when a person plans for their financial future. They have to consider all that is at stake when they retire. Let’s take a look at how much a person needs to save if they start in their twenty’s vs starting in their thirty’s or even forty’s. If I am ‘X’ yrs. old, How Much Should I Save? Recommended Percentage of Salary:
- Twenty’s: 10%-15%
- Thirty’s: 15%-25%
- Early 40’s: 15%-25%
- 45 and above: 40% or more
- Resist the urge to spend excessively
- Think about long-term planning options
- Recognize the ability to save in a recession
- Savings Account
- 401K Plan
- Stocks
- Mutual Funds
The recession scares a lot of people into thinking that they will lose money. It is okay to be scared, but this is not an excuse for poor financial planning. People should spread their money around. A savings account should be in place, but there should also be a plethora of other investments such as index stocks and well-known mutual funds. Successful planning requires a lot of research. But it can be done if planned correctly and you will thank yourself when you are approaching retirement and come to the realization that the early start will allow you to maintain your standard of living and more in your retirement