How Much Of My Income Should I Save So I Won’t End Up Struggling In Retirement?

Can I Afford To Retire?
Financial Freedom
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65% Of Americans Save Little Or Nothing

Yesterday I wrote a post on this very subject, called “Are You At The Point In Your Life Where You Ask Yourself, How Can I Afford To Retire?” Later on last night while researching online, I came across a related article by CNBC that discussed a survey by Bankrate, with the title “65% of Americans save little or nothing – and half could end up struggling in retirement.”

I thought I’d mention some of the data in that second article and discuss it here. Bankrate found out in their survey research that 20% of Americans don’t save anything at all, and those who do don’t save much. Only 16% of responders said that they saved more than 15% of what they earn. 15% is generally the savings percentage recommended by financial experts. Here’s a chart showing annual saving percentages.


What the chart tells me is that three quarters of the country don’t save enough to be able to retire, or at least to retire without struggling.

How Much Should I Be Saving For Retirement?

The experts say at least 15% of income. Is that gross income or take-home pay? Doesn’t really matter, does it? Just pick one and start saving! If you don’t, chances are that you’ll be unable to afford retirement. Here’s an example: If I make $50,000 per year, I should be saving $7,500 per year, or about $625 per month.

That’s if you’re young and starting out. Let’s say that you catch this post at age 20, and decide to save $7500 per year for the next 45 years, at 5% interest. According to the Edward Jones retirement calculator, If you could do that, at age 65 you’d have close to $1,200,000 waiting for you in your retirement fund. You could live any lifestyle you wanted.

But, suppose you don’t get started until age 40. You still make $50,000 per year.  You decide to save the same $7,500 per year to age 65, at the same 5% interest. When you’re ready to retire you will only have about $358,000 waiting for you. Big difference, isn’t it? Of course, you may be able to save more per year. Maybe $1000 per month, or $12,000 per year. What then? The results are better, but still only a little better than half what you would have made starting at 20 years old. Saving $12,000 per year would yield you about $573,000 at age 65.

So you see the benefit of beginning to save while still young.

What Lifestyle Do You Want To Live In Retirement?

Let’s take a few minutes and discuss your plans for when you retire. What kind of lifestyle do you want to have? If you’re struggling now to make ends meet, do you want to keep struggling after you retire? Wow! What a drag it is to look forward to that kind of life.

Don’t you want retirement to take the pressure off? Don’t you want to be able to sit back and relax and enjoy it? Well, Houston, we have a problem. There’s not much chance that you’ll be getting MORE money when you retire than you’re making now. It’s pretty much guaranteed that you’ll be making LESS. How’s that going to let you relax?

What’s Keeping Us From Saving Money?

Bankrate found “expenses” to be the #1 deterrent to saving. Here’s their chart:


According to Bankrate, the average American has less than $5000 in a financial account, and those approaching retirement age, 55-64, only have $120,000, which will go fast. That’s financial failure, and that’s pretty common among Americans.

What Can We Do To Improve Our Retirement?

There are some things we can do to improve our retirement outlook. We can reduce expenses so that we don’t have those extra payments when we retire. We can look into a smaller home and a more economical car. We can reduce grocery costs, eat out less, and eliminate “frills.”

We can eliminate debt. That’s an important goal anyway. Becoming debt free brings financial freedom. Check out Dave Ramsey’s Debt Snowball method for becoming debt free.

If you can, you can perhaps take on additional work, like a second job and save the money. After retirement, some of us take on part-time jobs to take some of the pressure off of our savings.

If you don’t want to work at all after you retire, then you have to plan ahead of time and prepare.

What I’m Doing Is Starting An Online Marketing Business!

Start an online business

My retirement is pretty good. I’m 66 years old and have been retired since age 60. I’ve got a military pension and social security. It pays the bills and keeps the creditors away. My wife just retired at the beginning of this year, so her income dropped significantly. She’s getting monthly payments from her 401K, but only about a third of what she was bringing home before.

I’ve looked into affiliate marketing as an online business, done my research, and decided to join Wealthy Affiliate. There are a lot of good affiliate marketing training platforms online, but Wealthy Affiliate is, in my opinion, the best.

What Is Affiliate Marketing?

What’s affiliate marketing? In a nutshell, it’s bringing customers in contact with products that they want and getting paid a commission from the company selling the products for doing so. Everyone’s happy. The customer gets the product she was looking for, the company gets the sale, and you get the commission.

You don’t have to own the product or carry inventory. You just need an affiliate agreement with the company selling the product.

Breaking into affiliate marketing takes some training and consistent work mostly because there are so many websites competing for the customer’s business. If you learn the ropes, work hard, and are persistent, you have a good chance to succeed and pick up your share of the hundreds of millions of people who shop online. As your business grows, it’s entirely possible to earn a 5-figure income every MONTH! That doesn’t come in the beginning, though. You have to build up to that.

That’s one of my goals. I want a five, or even 6-figure income every month! My retirement will be SO much better than my working years were!

Wealthy Affiliate lets people join for FREE. They want you to see for yourself if it’s for you. Why not take the opportunity to see for yourself? Join Wealthy Affiliate today and see what’s it’s all about. You can click on the link or the banner.

The FTC requires that affiliate marketers disclose to those visiting their websites that if you click on an affiliate link and purchase a product, the affiliate will earn a commission. That’s what affiliate marketing is all about.

Thanks for reading my post. Good luck with your retirement, I hope it’s great! Leave me a comment if you’d like, or pass along my post.

I’m Grant.

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You are right, we all need to save more for our retirements. It’s easy to save money when you are in your 20’s and dont’ have a family or a home mortgage to pay off. Unfortunately because you don’t have the pressure of fixed bills every month it’s easy to think that this extra money is “disposable” and we all spend it on clothes, alcohol and travel.
It gets harder to save later in life and the difference in compound interest is staggering.
I was just wondering if you were able to save some of your income every week as you went along?

Hi, Glenys. Nope, I wasn’t a saver in my younger days. I should have been, but like you said, I wasn’t concerned about it then. I should have been, though. 

I never saved when I was younger, and I’m trying to play catch up now. It’s so easy to just not think about it when you’re young and enjoying life. Then suddenly you realize that you’re getting older and have little to nothing saved. It’s a kind of scary realization. I don’t want to be a burden on my children, so I am working on saving more than most people now. Catch up time, and working online would definitely help for some extra cash to save.

Great comment, Theresa.  I’m just like you.  I didn’t save anything in my younger years either.  Too bad we are that way when we are young, hun?

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