Start Saving Sooner: Individuals who start saving for retirement after the
age of 45 have to save at a rate that is nearly twice as aggressive as
individuals who begin saving at the age of 35, according to the National Savings
Rate Guidelines study. The gap grows much wider for individuals over the age of
55, the study says.
For example, a 35-year-old employee making $40,000 annually would have to
save at a 16.4 percent rate to generate 80 percent income replacement for
retirement. A 45-year-old making the same salary would have to save 29.5 percent
to save that much and a 55-year-old would have to save at a 79.8 percent rate to
generate that much savings, according to the study.
Even employees whose income increases faster than inflation will have to save
more to “catch up” if they want to maintain their standard of living in
retirement, the study says.
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