What percent of my income should I be saving in order to FIRE?
I was reading some T. Rowe Price literature that addresses the amount of annual income that needs to be saved to achieve a sound retirement income plan:
"Our research shows that you can build a sound retirement income plan if you follow some standard guidelines," Fahlund says. The rule of thumb is to plan on replacing 75% of your preretirement income. As much as 50% of that income may come from investments, 20% from Social Security benefits, and the rest from other sources such as a pension or part-time work. Most people need to save 15% of their annual income, including any employer contributions, to achieve those percentages. On the other hand, your savings percentage may ned to be higher if you're getting a late start.
I assume that this article assumes that person's retirement age would be 65. I want to retire before that age. But, I am trying to figure out if the 15% of annual income savings recommendation, based on their advice, is meant to include my employer's match on the 401k plan (4% in my case) or the defined contribution pension plan (5% in my case)? What percent of your annual income are you currently saving? Is there a recommended percent for someone who is trying to retire early? I suspect that the recommendation depends, in part, on one's current annual income, timeline to retirement and estimated retirement budget. But I am just looking for some ballpark estimated annual saving percentage recommendations. Thanks.
I was reading some T. Rowe Price literature that addresses the amount of annual income that needs to be saved to achieve a sound retirement income plan:
"Our research shows that you can build a sound retirement income plan if you follow some standard guidelines," Fahlund says. The rule of thumb is to plan on replacing 75% of your preretirement income. As much as 50% of that income may come from investments, 20% from Social Security benefits, and the rest from other sources such as a pension or part-time work. Most people need to save 15% of their annual income, including any employer contributions, to achieve those percentages. On the other hand, your savings percentage may ned to be higher if you're getting a late start.
I assume that this article assumes that person's retirement age would be 65. I want to retire before that age. But, I am trying to figure out if the 15% of annual income savings recommendation, based on their advice, is meant to include my employer's match on the 401k plan (4% in my case) or the defined contribution pension plan (5% in my case)? What percent of your annual income are you currently saving? Is there a recommended percent for someone who is trying to retire early? I suspect that the recommendation depends, in part, on one's current annual income, timeline to retirement and estimated retirement budget. But I am just looking for some ballpark estimated annual saving percentage recommendations. Thanks.