Investing & Savings


A recent US News & World Report stated:

“A median-income family that saved 3.2 percent of its income-roughly equivalent to the national saving rate-would sock away nearly $2,600 per year for retirement. Of course many families don’t hit even that modest goal, and stock-market losses over the last several years have further shrunk the national nest egg.”

The report specified that this statement was based on two other findings: the median income for a household is $81,000 and the median income family is a four-person, two parent household.

Does anybody else find 3.2% to be shockingly low number? And $2,600 a year directed towards retirement seems like a recipe for an uncomfortable way to spend your ‘golden’ years.

If my trusty Retirement Savings Calculator (I’ll post a link to the one I use) is correct, if you were to start saving $2600 a year at age 20 and continue with this annual contribution until the age of 65, you would have an a retirement savings of just over $1MM (I’m assuming an Expected Annual Return of 8%). And if you were to start your retirment savings just 10 years later, your retirment fund at the age of 65 would shrink by more than half to just under $450,000.

The point -at the current rate of inflation neither one of these scenarios would result in a very secure/comfortable retirement fund.

Nearly every personal finance guru, book, resource, etc will encourage individuals to put as much as possible into your retirement plans. And while I’m certainly no expert and my current net worth is hardly worth a mention, I cite the US News & World Report simply because I think it’s important for all of us to think about our future financial security.

The method that I think makes the most sense is to do more each year … whatever that means in your individual circumstances. If you saved $1000 in your retirement fund last year, perhaps that means setting a goal of adding 20% to that number the following year – $1200. Regardless of your individual approach, a combination of increased earning potential (more earning power in later years) and a focused attention on spending less than we make (and finding opportunities to cut our spending even more) thought put you in a much better position when it comes to your retirement fund.

But as the saying goes – “Even a waterfall starts with a single drop” – and you have to spend time in your early years (your 20’s, 30’s and 40’s) actively planning for and contributing to your retirement goals.

And here’s a useful start – the Retirement Savings Calculator I mentioned above is available at –

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