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Many people tend to worry when they think of saving some money. You hear things like “I make just enough to free myself. Why do I still need to save?” or “How do I save with all my expenses?”

These questions are valid and they’re also answerable.

Surveys have been carried out by Bankrate among United States citizens, and over 60% of the people don’t know how much they need to have in their savings account when they retire. About 20% of the working class people don’t even save. This is not advisable, to say the least

The earlier you start saving and investing your money in profitable areas, the better you would be in the nearest future. Irrespective of your age, you can start saving today and enjoy huge benefits as a result of compound interest on the money saved over the years.

How much should you have saved at the end of retirement?

When asked this question, I am always hesitant to answer. This is not because I don’t know what to say, but because there’s no straight answer to this.

How much you have when you finally decide to suspend working till the end of your days depends on how you want to live when you retire.

I have some friends who spend a lot. When they get some money, they get new phones, go to parties, and then spend on friends till they get another big bonus.

People like this would maintain the same behavior in their retirement days. They would probably get the latest BMW and buy a mansion with a large swimming pool in the back. These people need to have millions sitting in their bank account when they finally wrap up.

Meanwhile, someone who is less keen on spending may decide to save less, although he may end up wishing he saved more when he finally wants to travel to see the world.

Fidelity gave its recommendations on what you should have in your account when you retire. When you reach 30 years old, you should have saved up your annual salary. At age 40, you should have 3 times your salary. When you’re 50 and approaching the general retirement age, you should have 4 times your annual income, and as you approach 70 years, you should have about 10 times your annual salary.

If you can put it in some effort, you can have 12 times your annual salary at the end of your work life, and retire with a big smile on your face.

Simple ways to maximize your savings per age bracket

In your 20s

The feeling of being in your 20s is both scary and exciting. You’re just starting your life full-time. College just ended and you just started earning from the company that offered you a job immediately you graduate. All your friends who also have jobs invite you to parties every Friday, you go shopping on weekends and get back home with your debit cards feeling tired. You feel everything is happening for you.

Some people in this age category are also just trying to figure out their lives. They work with a small company that pays them stipends, and they only use their money to feed and get necessary things.

In whatever category you find yourself, saving as much as you can for your future is very important. Here are few ways to plan for retirement in your 20s –

1. Use your employer’s 401k

Taking advantage of your employer’s 401k plan is important during this period. You’re actively saving towards your future by depositing some money out of your paycheck. Why is it better to do this rather than collect the complete salary and then throw some of it in a savings account?

The 401k plan is automated. You don’t get to feel it leave your salary because it was never there, to begin with. When you collect the entire salary, you may become tempted to spend the money and end up saving nothing.

Moreover, 401k is tax-advantaged. You don’t get taxes deducted from the money in your retirement account.

If your company doesn’t offer 401k, consider a Roth or traditional IRA (Individual retirement account). While taxes would have been collected before you put your money into them, you get to withdraw everything you’ve saved up without any tax deduction.

2. Emergency fund

Emergencies happen every day. Something unexpected can always happen which would require some spending to fix. Recently, I was robbed on my way out of the house. Luckily for me, I was holding nothing but my phone which they took away. I had just purchased the phone a few weeks prior. I didn’t break a sweat to purchase another one because I had an emergency fund.

An emergency fund prevents you from putting your hands into your retirement savings when an emergency arises.

As you save for retirement, you should also save for emergencies.

3. Buy stocks

Hey, don’t be scared. There are ups and downs of buying stocks, but you’re still young. You’ll definitely deal with it and get out stronger. Most times, investment in stocks yield great profit. Instead of going to individual stocks, you can try looking into target-date funds and mutual funds.

In your 30s

The 30s are filled with various money-grabbing decisions such as having a house, getting married, having kids and several others. All these decisions are money wrenching and you may begin to find it very hard to save during this period.

According to Fidelity, you should have your annual salary when you’re entering 30. At 35, you should aim to have saved 2 times your annual salary. When you’re 40, you should have gotten 3 times your salary sitting in your retirement account.

How can you keep your retirement account from falling apart while you take care of all your life situations?

1. Be financially faithful to your spouse

Do you know financial faithfulness is equally as important as emotional or sexual faithfulness? What do I mean?

While you may think the worst thing you can do is cheat on your spouse with another individual, keeping your true financial status a secret is equally bad. This has been a deal-breaker in many families when a partner has a secret account when in a committed relationship. It is advisable for both parties to put all your cards on the table and make plans for retirement.

The advice is not to open a joint account where both of you put all your money (which isn’t a good thing if you don’t have excess. It is to make plans together so one of you doesn’t end up ruining things for the other. With divorce comes greater responsibilities and equally greater spending.

2. Increase the amount you throw in your emergency fund

Your emergency fund shouldn’t die in your 20s. Because you’ve left that stage and now make much more money doesn’t mean you should squander what you have in your emergency fund. Instead, you should ramp up the emergency fund. If you’re in your 30s and you have a family, their emergency situations become yours. You and your spouse may not be on equal footing financially and you may have to spend more. Getting rid of the emergency fund is causing more trouble for yourself because you would definitely have to pull something from your retirement fund, and you’ll never reach the goal.

3. Ramp up the 401k savings

In your 30s, your salary has definitely increased. Even though your responsibilities have increased too, it is to put more into your retirement account (whether 401k or IRA). If you’ve been putting 10% of your monthly salary into it before now, it is time to increase your monthly input to 15%. And if you were putting less than 10%, you should definitely increase it. This way you’re assured of steady growth.

The funny thing about saving for anything (especially retirement) is that it is always best to start young. Imagine you start working at 24 years old and begin to save $5000 per month. If you continue saving that amount, you would have accumulated $2.16 million by the time you’re 60 years old (without calculating the interests accrued). If you decide to start by 40 instead, you would only have $1.2 million at 60.

In your 40s

When you’re in your 40s, you’re slowly moving towards retirement age. You should have more than three times your annual salary in your retirement account, and you should be making plans to even increase the amount you’re putting into it.

1. Clear your debt

Many people live with debts on their credit cards. They purchase stuff and the money piles up without them replaying. Eventually, you’ll have to pay. If you’re living with credit card debt, this is the time to pay it all off.

Either use a debit card or try a no-fee balance transfer credit card. You can decide to pay the money in installments till you finally complete the payment. When you’re free of debt, try to add the same amount you were owing to you your retirement account monthly, since you’ve discovered how to live without that money. With this, you’re killing two birds with one stone.

2. Be careful with college spending

For people that get married and expand their family earlier, their children would be entering college while they’re in their 40s. While this is a joyful experience, it could be devastating for whoever is sponsoring the child’s college education, especially if you didn’t start saving towards your child’s college education since he was a toddler.

You might have emptied your emergency fund and even begin considering using some of the money in your retirement account for this purpose.

You should think twice before you try it. Most parents tend to do things for their children at the detriment of their own needs.

You can be very strategic about how you spend this money. Instead of sending your child to an expensive private college, you can consider a state or federal college which are more affordable. This way you keep your retirement account untouched.

In your 50s

At this time, your work period is coming to a gradual end. You must have saved up to 4 times your annual salary in your retirement account and still be looking forward to increasing it.

1. Organize your retirement budget

You’ve been saving towards retirement for some decades. It is now time to know what those savings are going to do when you stop working. As mentioned above, many of us spend a lot and would probably purchase some unimportant things during our retirement days. Whether you’re that person or not, create a simple spreadsheet where you list all the things you want to do when you retire, and try to estimate how much each of those things cost.

This way, you’ll know how far you’ve come and how long you still have to work before you get all you need.

2. Settle your medical bills

The body is getting weak for some people. There are now medical bills to settle because the body becomes more susceptible to infections and diseases as we age. You have to go for regular checkups to ensure you’re still fit and healthy. Your retirement budget should also have room for medical costs because at old age because you don’t want to spend all the money you’ve been saving for other purposes on medical emergencies.

In your 60s

Social Security

There are benefits of social security which you can finally take advantage of when you’re in your 60s. It is always better not to touch your social security benefits until you attain the age of 62, so you enjoy the maximum benefits. The longer you wait, the greater your benefits.

For people born after 1960, you reach retirement age at 67. Till then, you can’t receive full retirement benefits. For those born before then, your retirement age varies from 65 to 67.

Social media benefits can create more funds to use during your retirement.



When you finally retire, you have to develop strategies to spend your money properly and not squander it in your first few years of retirement. These strategies should also include ways of reducing taxes so you can enjoy your money to the fullest.

I am on a budget. How do I maximize my retirement savings?

Not everyone makes as much as they would want to. Many people make just a little so they have to plan on how to spend that money even before it comes. Most of them don’t think of retirement savings and the ones that do are confused about how to get it to work. Here are few tips to help you increase your retirement savings as a low-income earner –

1 Get a side gig

With a side gig, you might not have to save any money you make from your daily income. If you can live comfortably on what you earn from your regular job, you can decide to throw all the money from your side gig into savings, or spend some and keep some.

In this age where the internet has become a marketplace, there are several jobs available for skilled individuals. They could be freelance, remote, or part-time jobs, and some of them pay quite well.

2. Cut off unnecessary spending

A reason many people on budgets find it difficult to save is that they spend the rest of their money on unnecessary things. It is important that you have fun, but you should have just enough to reserve some for your retirement days. For instance, if you have two cars already, you don’t need two extra vehicles sitting in your garage. Cutting down expenses saves you a lot in the long run.

3. Automatic contributions

Just like your 401k is automatically deducted from your monthly salary, if you’re using IRA, you should set up automatic deductions so you are not even aware of the money that has left you. With automatic deductions, you can organize your monthly budget on what you have left while your retirement savings remain untouched.

If you’ve started saving towards retirement, share your how far you’ve gone in the comment section below, and you can contact us if you have more personal questions.

