Graphic: How Much Should You Have Saved Up for Retirement Today

The rate you save should change depending on your age and how much you earn. It’s important to save when you can and change your saving habits as you get closer to retirement. The table shown above is a savings calculator tool. This should be a guideline to help savers understand how much money they should have saved in preparation for retirement if they have been saving about five percent of their salary.

Graphic: How Much Should You Have Saved Up for Retirement Today

The table is broken into two categories; on the y axis is the age category, beginning at thirty years and ending at sixty five years, with five years intervals in between; on the x axis is salary, starting at fifty thousand dollars and ending at four hundred thousand dollars.

To use the table a person must first find the number closest to their age on the y axis and then the number which closest approximates their salary on the x axis. At the intersection of these numbers will be another number, which, when multiplied by the salary, will indicate the amount of money a person should have saved. Guides like this can be helpful tools in determining your saving rate, and accessing your current saving habits.

Old People’s Spending Habits Are Bad for the Economy

Because the United States is largely a consumer spending based economy, keeping an eye on spending habits is integral to the understanding and predicting future trends and economic growth. Economists need to know who buys what, how much they spend, and when in their life they spend their money. They cross reference this data with the demographic makeup of the country to get a better idea of which direction the economy is headed.

The Way Old People Spend Is Bad News for the Economy
via JP Morgan Asset Management

As you can see above that data shows that spending on all products and services tend to taper off after American’s forty-fifth birthday, housing and healthcare being the only two exceptions, which bodes poorly for everyone who isn’t a nurse or a real estate agent. With a large number of American baby-boomers headed into retirement, their reluctance to spend on common goods and services can act as a bit of a drag on a consumer based economy, but, on the other hand, adds certainty to the very important housing market and health care industries.

How Much You Need to Be Saving to Have $1,000,000 at Retirement

One of the realities of life is that you can not remain young forever. This is one of the major reasons why it is good to save for retirement. However, saving for retirement could be a very tough decision but gut is needed here to make it successful. So, if you have made up your mind to retire a millionaire before clocking fifty.

via Business Insider

Just take the bull by the horn and follow this expert advice: – Ensure you start your savings very early – Set aside some amount from your monthly savings as a starting point – Ensure you are saving close $700 a month in order to become a millionaire before you a fifty years starting from 20 years. – Let your savings match the return rate as shown in the charts

Graphic: How Much Should You Have Saved Up for Retirement Today

Check out the handy table below from JP Morgan Asset Management’s 2014 “Guide to Retirement” that details how much should you have saved up for retirement today based on your current age.

How Much Should You Have Saved Up for Retirement Today

The chart details the amount of money a person must have in retirement funds saved to have sufficient funds to maintain their lifestyle after retirement. The chart clarifies that if people begin saving at a younger age for retirement the funds will grow greatly because of compounding interest. The chart is used with a intersection of both age, and yearly earnings.

Albert Einstein once called compounding interest the “8th wonder of the world”, and this chart demonstrates this maxim is true. The chart assumes a retirement age of 65, and allows for 7% growth in pre-retirement fund earnings, and 5% growth in earnings after the retirement age of 65. The chart assumes a annual contribution of 5% from the working person for their retirement. It also forecasts an average of thirty years retirement after the age of 65.