The tried and true of the past when it comes to retirement planning will likely no longer work for today’s working population, according to a LA Times finance columnist asked about the percentage of income that should be saved for retirement on an ongoing basis.
“Does advice of saving 10% of income for retirement still apply?” the column asks.
Responding to a reader question as to whether saving 10% of income will suffice and how exactly the savings should be amassed over time, columnist Liz Weston advises that saving 10% is a rule of thumb for people who begin saving in their 20s.
For some, especially those who started late, working longer will help. Another solution is to begin claiming Social Security at a later age and to consider the housing payments that have been made, or will no longer have to be made in retirement.
“If you can’t carve out a huge chunk of your income for retirement, though, you shouldn’t despair,” Weston advises. “Save what you can, as anything you put aside will help supplement your Social Security checks. You may find that your expenses drop substantially in retirement, particularly if you have a mortgage paid off by then, so you won’t need to replace as much income as you think.”
Written by Elizabeth Ecker