Retirement Savings Basics

How much should you put aside for retirement? As much as you can. Look at your budget (you have one, right??!) and see what you can spare. Just as you would with short term goals, think about what you want for you retired life and what you're willing to give up now to get there. As you get older, these goals might change, but try and settle on something for now. 

For me, I would like to sell any property that we own and travel as much as possible. We would need a small cottage in Mexico or a pied terre in a city offering international flights as a "home base" and that's it! That could change, but for now that's what I want. So how to get there? 

Save, save, save. The same compound interest that you curse when it ups your credit card debt can be used to your advantage when saving for long-term goals. For example: a person who saves $100 per month at 30 will have more than $100k at retirement than a person who begins saving that same amount at 40. $100,000 earned with only $12,000 saved! How can you pass that up? 

If you are lucky enough to have an employer who matches your retirement savings then absolutely take advantage of it. Free money! 

Ideally, you will have 15% of each paycheck earmarked for retirement, but that is a biiiiiiiiig chunk if you also have a mortgage, debt, etc. Start small. Make a contribution for at least the amount that will be matched. If you don't have the advantage of matching then start with 5%. Every few months reevaluate your standings and increase your savings. 

How do you see yourself retiring? Will you travel? Work part time? Build an underground bunker and go off the grid? I want to hear all about it!