Are you saving enough for retirement? We had a chance to chat with reporter Laila Maidan of Business Insider about designing a personalized retirement roadmap tailored to meet your specific goals. While saving 10% to 15% of income each year is a solid rule of thumb, that advice may not be suitable for everyone. A simple four-step plan can point you in the direction you need to go.
First, take some time to think about your goals and what kind of lifestyle you want in retirement. Second, inventory your retirement resources to determine where you are starting from.
There is a handy planning guideline to help you tell if you’re on track. For years, we have been using the Assets to Income Ratio, a simple reference guide we’ve offered clients to measure their retirement readiness. Using the Assets to Income Ratio, you can tell if you’ve set aside enough savings for retirement based on your current age.
Third, use the objective results from the Assets to Income test to see if you’re in good shape, or if you need to tweak your plan to save more. Lastly, your 401(k), Traditional IRA or Roth IRA can all be good options if you need to play retirement catch-up. All these plans allow you to save more for the future while taking advantage of tax savings and other perks.