This means that retirement saving is becoming more self service, with the bulk of the responsibility on the employee. Here's my personal self service plan:
- Save at least 12% of my income. We currently save about 20% of my gross salary. This helps us in two ways. First, we are nominally grown our net worth by the equivalent of one year's take home pay every four years. Second, we are routinely living below our means. Both factors contribute to our ability to retire more comfortably.
For reference, I did not always save 20% of my salary. In my very first month of employment, I ran of of money 3 days before the following month's paycheck. However, as I received raises, I always made a point reserving part of savings and part of increased lifestyle. Over time the part of saving has become 20% of my salary.
- Target for a minimum savings ratio of 12. Currently, our savings to income ratio is 15.1. Since I am conservative, our target savings ratio is 20. Also, I am not planning on social security payments to be available when I retire.
For more on Reaping the Rewards, check back every Friday for a new segment.
Photo Credit: morgueFile.com, Michael Connors
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC