HOW MUCH MONEY DO YOU NEED TO SAVE FOR RETIREMENT?

This question is always a point of high anxiety, and one gets worried when they think about their retirement and saving enough for it. Then, we come up with the question of whether there is a ballpark figure on how much I should save for retirement.

There is multiple dimension to these questions. But there is always a sensible way for everything. Usually, everyone would suggest saving 10-15 percent of your earnings for your retirement fund, but this is somewhat too conventional, we need to have a good estimate on how much money one should save for retirement.There should be an easy, understandable, and bite-sized retirement and long-term plans approach.

The 25x rule

To be precise, if you are making 100k, ideally, you should pay 80k after you retire. Here is a catch, you would require 25x of that monthly income to be with you at the time of your retirement. So if you want to have a goal of 40k per month, you should have 1 million dollars with you at the time of your retirement.

The second step is only to withdraw 4 percent of your retirement fund annually.

This is a beneficial and advantageous system where you can get the full benefits with effective and optimal measures.

What's a good time to retire?

Well, if you are planning to play safe. 65+is an excellent age to retire and get social security benefits. You can enjoy yourself with your grandkids and live naturally fat and happy. On the contrary, if you want to live a hassle-free life, RETIRE EARLY. How cool does it sound if you manage to get your retirement fund at 35? You can live a free life without any worries about income.

So, a retirement fund would be your best companion if you are an early bird.

When should you start saving for a retirement fund?

As I explained the 25x principle, it is up to you to decide your income and set easy and bible goals for attaining the desired income.

It is ideal to begin early. The earlier you start saving, the quicker you can get the finances in order and get desired results for your long-term saving goals. The compounding works miraculously. The earlier you start, the more your principle would be multiplied, and better results would be available

Emergency funds

Along with the retirement fund, another essential thing is an emergency fund. This fund will help you in distressing times and hard days. An emergency fund should be an ideal fund that could house 4-5 months of your monthly expenditures. So if you have monthly spending of 4k, you must have 16k-20k as an emergency fund. If god forbid, you face any hard times, the emergency fund would cover up your rainy days.

Why the 25x rule?

It's a strong and well-defined process. You can adjust the fund per your goals if you love traveling or exploring new places. You can save funds to meet those demands and relax while retiring. You will be getting a direction in your life. Your goals would be solid rather than an undefined retirement fund goal you are uncertain about.

I would suggest stressing your needs and finding out what your monthly expenditure would look like after retirement. If it is higher, you can allocate more toward your end goal. Your savings will cover everything if it's the same as your current earnings.

This goal would be 25x your life and joy after retirement.

The downside of the 25x rule

The only downside of the 25x rule is that you would enjoy saving for your retirement and wishing you knew it earlier for a mega retirement plan and a life full of ease after your working days are over.

Final recommendation 

Set your goals and start understanding the 25x rule. Start saving early, and you never know how quickly time flies. Start learning about the power of compounding, and it will do miracles for you in the long run. Live the moments and save for your future once you have reached your goal. It's time to say bye to your working schedule and relax on all the hard work you did saving for your retirement fund. You should wisely save money for your retirement since it is the only hope you will be having after your salary. Never ever spend the retirement savings in case of an emergency rather you should utilize the emergency funds in the time of need.