How Much Should I Save for Retirement?

Jason Bernal

December 31, 2018

It is very common for folks to ask us if they are on track for retirement and how much they should save.   Saving for retirement doesn’t have to be that hard.  Here is a simple plan for saving for retirement. 

We recommend saving 15% of your GROSS income. Yes- Gross Income!! 

  1. Contribute to your 401(k) up to the match.
  2. Roth IRA contributions up to $5500 (the IRS max contribution) or 15% of your income
  3. Back to the 401(k) to hit the total 15%

Still confused….Here is an example.  I make $60,000 annually and my company match 3% on my 401(k) contributions.  So, you need to save 15% of $60,000 annually or $9,000. 

  1. 3% of $60,000= $1800 still need to save $7200.
  2. Max out the Roth IRA with $5500 annually still need to save $1700.
  3. Now we go back to the 401(k) with the remaining $1700 or another 2% of your salary (total 401(k) contribution will be 5% of your salary.

Another one… I make $35,000 annually and I don’t get a 401(k) match. You need to save 15% of $35,000 or $5250.

  1. No match, no contribution into the 401(k).
  2. Roth IRA of $5250 satisfies the 15% and is under the max contribution- You did it!!

Secret weapon for retirement savings- Behavior.  YOU JUST NEED TO DO IT.  If you don’t know what to invest in, just contact us at Blue Jay Financial Group to schedule a time get your retirement plan going.