Here’s how much you should have saved for retirement by the age of 40

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newby_investor

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SauRoNZA said:
No no, what I mean is in your earlier years you would pump every bit of extra into your investment to build up your capital.

Max out your 27.5%. Pump your TFSA. Invest your bonuses etc.

Come 40+ you can then probably start scaling it back a bit a live a little if you put the hard work in earlier.

Drop down to 15%, use your bonus for nice things etc.

Most however wouldn't have made the effort and will need to do the opposite of ramping it up instead.
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In principle you're right, but it's hard for a lot of people to do that. In the start of your career, you're typically not earning very much, and especially if you're trying to break out of the so-called working class you might be supporting family members.

If you come from a well-off family and you have a bit of a head-start then sure. When I started my first real job, rent was probably my biggest expense, switched to a bond within a few months. I wasn't able to save more than about 10% of my salary. I'm at a much bigger portion of that now, mostly because bond has gotten smaller while salary has gotten bigger.
 
Nerfherder

Nerfherder

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krycor said:
I think a better way to look at it is vs years worked.

Yes technically you should consider age but at the end of the day not everyone will start work at 24 let alone earn more than a miner albeit with a degree. By that same token not everyone will be able to retire at 65 and may be forced to at 75..

By that same token as a late starter you need to bump your contributions up or have an exodus plan vs SA.
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I think most of our current generation wont be able to stop working at 65. Cost of living is increasing and many people who are 65 now are being forced to keep working already.
 
Lord Farquart

Lord Farquart

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P924 said:
Perhaps you should double your odds by playing the lottery.
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No need to. Well on my way to having 2 successful kids. And I stopped investing in all these schemes from the likes of this sponsored article years ago. No worries here.:D
 
Nerfherder

Nerfherder

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newby_investor said:
In principle you're right, but it's hard for a lot of people to do that. In the start of your career, you're typically not earning very much, and especially if you're trying to break out of the so-called working class you might be supporting family members.

If you come from a well-off family and you have a bit of a head-start then sure. When I started my first real job, rent was probably my biggest expense, switched to a bond within a few months. I wasn't able to save more than about 10% of my salary. I'm at a much bigger portion of that now, mostly because bond has gotten smaller while salary has gotten bigger.
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Yes, its better to stay out of debt and get some assets going.

Also when you are older and earning in the max tax bracket the returns are better to be contributing more.
 
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Lord Farquart said:
The day I decide to embrace black cuture, you kick the paint tins from under my bed.:mad:
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It boils down to how much you trust your children. I share your views personally - I'd rather invest in my children (the one that's on the way anyway) than in an investment company, but it's also a risky proposition. At the moment, I'm not sure whether my child will make it into adulthood! If I look at my siblings, who are all still quite dependant on the bank of Dad, no way they'd be able to support my parents in retirement. I might be able to, but it would be a bit of a squeeze.

If you've got two successful children, then good for you, you've obviously done something right as a parent. You're very lucky.
 
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