A study says that Americans aren’t good in saving money.
People are learning from their young age, the Regular Report. Even if you are years from retirement, you may not think it’s necessary to start saving for your retirement. Approximately you will need about 70% of what you make at the peak of your career to maintain that standard of living in retirement. You should make plans for expected and unexpected life events, and start saving aside money for that. However, this isn’t shown in practice in the U.S.
With saving not on their strong site, the majority of the American population couldn’t set aside a penny per month. This explains the fact that they are living paycheck to paycheck, USAToday stated. What is more disturbing is shown in a survey, that almost half of the Americans aren’t saving for their retirement, saying the Social Security will provide some income for bill paying at retirement.
This income by Social Security is made to generally replace 40% of the average earner’s pre-retirement income. In fact, that amount isn’t enough for comfortable living, which include housing, transport, food health care which could increase in these days. Where the Social Security doesn’t pass, independent savings come in. As the Regular Reporter noted why a high credit score is beneficial, here you’ll learn how to save money.
Eking out savings
It can be hard to change your ways, when you haven’t been saving money. But you have to push yourself harder, because you may be sorry later. The beginning is always the hardest. Here is a tip on how you can start saving money the easiest way: create a budget that you will follow and identify the costs of preventing you from saving, the Regular Report notes.
For instance, if you live in a flat alone with two bedrooms and the rent is high, start by letting the other room to other people. The money that you will save start by investing them in a fund for your retirement. The point is, to see where you have space to cut corners and save money.
However, that depends on you if you are willing to save or not. Get a second job, where you can bank a few hundred dollars a month, while working only on the weekends.
How much is enough for a good retirement?
This question is among many Americans, the Regular Report states. Well it depends on their goals. 25 year is good period for saving and investing money. A $250 investment per month for a period of 25 years at an average annual 7% return on stocks, will wind up a good sum. That is $75 000 invested, and at the end cashing in more than $190 000.
With more money invested at the beginning, the income is different. For example $350 or $500 monthly investments at 7% return, will bring you $265 000 or $379 000. That is for the 25 year period mentioned above.
Everything is easier when you are young, an old saying stated. However, making savings a priority while still young, will grow you wealth. The fact that nearly half of Americans aren’t saving for retirement is troubling on many levels, but if you make an effort to build your own nest egg, you’ll avoid being a part of that unfavorable statistic. More importantly, you won’t join the ranks of the many seniors who inevitably struggle during their golden years.