Everyone knows that they need to save money for retirement.
So the question, really, is just how much at your age should you be saving to retire comfortably?
In their latest Guide to Retirement, JP Morgan Asset Management outlined answers that might help you visualise how much you should have in the bank given your age and salary.
It’s a rough estimate, but to find where you should stand go to the left-hand column and find the number closest to your age.
Then, slide over to the box underneath the number closest to your salary.
Multiply the number in the box by your salary and that’s how much you should already have.
As an example, say you’re 35 years old and you make $75,000 a year. Based on the chart, you should have saved 1.6 time your salary at this point, or $120,000. This assumes you contribute 5% of your salary to retirement annually, you retire at 65 years old, and you die at 95.
Now, this is just a rule of thumb and won’t necessarily work for everybody, but it’s a good way to get an idea of whether you’re behind, ahead, or right in-line with a realistic retirement goal.