Profitt Report: How much money to save every decade of your life

Most people know they should be saving for retirement, but how much money do you need to save? Photo credit: Pixabay

You probably know you should save for retirement but here’s the big question: how much do you need to save?

“You have to prioritize, that's why I always say, pay you first,” said Jason Cryderman at Great Lakes Investment Advisors in Midland.

Cryderman said, saving for retirement isn’t easy. Especially when you’re young, saving any percentage of your income is tough.

“There are different theories that say in your 20s save 20 percent, 30s, 30 percent, a lot of it has to do with the current lifestyle you live today,” he said.

Here’s another way to look at it: Fidelity Investment suggests by age 30, you have one year of salary saved. By 40-years-old, you have three times your salary saved. By age 60, have eight times you salary saved.

Cryderman said, no matter how much, just find a way to save something.

“What we try to stress for all our families is save as soon as you can, if it's $5 a week, start somewhere and let that start compounding and pay yourself,” he said.

Compounding is powerful, take this example from JP Morgan: If you save $5,000 annually between the ages of 35 and 65, you’ll have $505,365. However, if you save $5,000 every year between 25 and 65-years-old, you’ll have more than a million dollars.

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