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Saving for retirement is the gnarliest of delayed gratification challenges. Tucking money away today in retirement accounts with the intention you won't touch it for decades is not a habit that most brains are hard-wired to embrace.
But save we must.
For most people, Social Security benefits won't cover all the bills in retirement. To land in retirement in solid financial shape, you also want to build your own savings in 401(k) plans and individual retirement accounts.
It's never too early to get started. (Hint: compound growth is your best investing friend.) Nor is it ever too late to make progress. (Another hint: Worried you won't have enough retirement income? Consider ways to reduce your spending needs in retirement.)
Like any big goal, breaking it down into manageable bite-size pieces keeps the task from veering into overwhelming. Focusing on a few key moves in each decade will set you up for a successful retirement.
You should aim to save about 1x your salary
Yes, you've got a lot of competing goals and, yes, retirement is a long way off. Understood. But the powerful math of compound growth means this is the decade where what you manage to save can exploit compound growth to its fullest.
You should aim to save about 3x your salary
You should aim to save about4x your salary
The challenge in this decade is to not take on big-ticket spending that can make it hard to keep up with your retirement plan.
You should aim to save about 8x your salary
Saving as much as possible remains Job One. But now's also the time to start getting a sense of how the pieces of your retirement income puzzle will fit together.
You should aim to save about 10x your salary
You've rounded the bend, with retirement in your sights. The big win this decade is to assume that you will live until 95.