There is no hard and fast rule on how much money you must save by the time you retire. Life is a journey where your goals and objectives change, including your financial obligations. Nobody is too young or too old to start saving money.
Yet, a person’s age is an effective guide point to start saving. If one considers age as a metric to assess your savings, how much should you have saved by the time you are fifty so that you can retire soon? The answer depends on a lot of factors like lifestyle, obligations, goals, dreams and ambitions.
In some countries, people retire early, and in other countries, people work well into their old age. If that’s the case, nobody else can tell you what’s best for you, but your experience in making money. There’s no harm in starting to save money regardless.
Assuming that at twenty, most people are still studying, there is still room to save the little money that comes by.
Not every 20-year-old would venture out into the open and secure a paying job. Generally, a 30-year-old has a lot more responsibilities on their shoulder. By 30, you should have saved at least 50% of your annual salary, according to the Business Standard.
This is a good practice to counter emergencies that come your way as people grow older and start a family life, priorities change and circumstances too. Having that extra savings can be helpful in the long run.
By the time a professional is 40, they probably have a better paying job. The experience gathered as a working professional, businessman or somebody pursuing their dream, is valuable.
If you haven’t already figured out the ideal savings or set up multiple streams of revenue, don’t worry. There is plenty of time before retirement.
Just keep working and dedicate time to figuring out the ideal savings plan that matches your lifestyle.
By the time you’re 50 people are likely to invest in a house, a mutual fund scheme, a loan or any other trap that comes their way.
Remember, 77% of Indians don’t save for retirement, while the other 23% manage to make retirement the safe haven as advertised. By the time a person is 50, they should have ideally accumulated wealth in the form of assets, people, places and things.
At this age, expenses may not seem as lavish as they once were. Ultimately, people can always push for a few more years of work before hanging the cape. If one saves 15% of their pre-tax income every year of work-life, by the time they reach the age of 65, they would have enough to live a peaceful life.
As the popular line goes, a stitch in time saves nine and age is just another number.