STEP 7 – SAVE 15% FOR RETIREMENT
Now that you have your emergency fund fully funded. It’s time to save for retirement.
You may be thinking “Adam, my kids are going to college in 3 years, I think I should save for that first”. Well, let me start by asking this: Are your kids going to help you put food on the table during your retirement? In almost all circumstances, the answer to that question is no. Therefore, why do you want to save for their college before thinking about your own retirement? You already know that compound interest works more in your favor the longer you invest.
By saving at least 15% of your gross income, you can build your wealth in a manner that will provide income during those retirement years. You should save these funds in various pre-tax (401(k), IRA) and after-tax (Roth IRA) retirement accounts.
When you reach this step, I recommend that you talk with a CERTIFIED FINANCIAL PLANNER™ professional. You can search for some in you area at the National Association of Personal Financial Advisors website. You can inform the planner of how much income you would like in retirement and they can tell you if should be saving more than 15% for retirement.
Start saving for retirement today!