It’s a good idea to begin saving a small percentage of your salary as soon as possible. It’s a simple way to ensure you’re prepared for retirement.
As a rule of thumb, most financial advisors suggest you save 10% to 15% of your earnings.
Here’s a case study assuming you start with no savings, plan to retire at 65 and have investments that earn 6% annually.
If you want to retire with $2 million, you’ll need to invest about 12% of a salary of $100,000 starting in your 20s. Waiting until you’re older will require a larger portion of your pay. If you wait until your 30s, then that number is closer to 17% of your salary. In your 40s, the percentage of your salary you’ll need to save jumps to 35%. This does not account for variables such as a possible pay increase or decrease, employer match, inflation or any other of life’s curveballs.
Watch this video to find out how much money you will need to invest to save $2 million for retirement, broken down by age.