I’m going to be completely transparent here: I did not do the best job saving for retirement in my 20’s. Or even a good job, for that matter. I did an okay job when I was 24/25, but then took like a 4-year hiatus. (My brother-in-law, an actuary, is probably reading this and dying).
Although some of my reasons are legitimate, others are excuses. Yes, I was broke, struggling, and battling credit card debt. But I could’ve done better. Lived below my means. Saved more.
I’m not going to be too hard on myself though. I’ve mentioned it before, but I think it’s crazy that society expects 20-something year-old’s to be so self-disciplined while figuring out their careers, life, love. I certainly don’t judge anyone for the financial decisions they made or didn’t make in their 20’s.
But, for anyone who needs to “make up” for lost time or who just wants to do a retirement “check-up”, the CNN Retirement Calculator is the best of the best. Forget about plugging in a whole bunch of information that just ends up confusing you more. All this calculator asks is your current age, your desired retirement age, the amount you’ve saved so far, your current income, and the percentage rate at which you’re saving. In just a few wonderful clicks, the calculator does the math for you and tells you whether you’re “falling short” or “on the right track.”
For me, as you’ve probably guessed, it was “falling short.” Worse, according to the calculator, I need to consistently save 18% of my salary beginning now until I retire. 18 percent! I was shocked when I found this out, but I’ve since recovered and accepted it.
Remember, since retirement contributions are pre-tax, saving for retirement really isn’t as hard on your paycheck as you might think.
So go ahead, give it a try! Play around with the “Savings Rate” slide at the bottom to see where you’re at, retirement-wise. Then, make adjustments. That’s the most important part: make the adjustments.
Yes, there are a lot of factors involved: The calculator assumes you’ll live to age 92 (you could live longer) and that you’ll live comfortably off 85% of your pre-retirement income. But if you’re like me and math gives you a headache, this is a great, simple way to track your progress.
And who doesn’t love more simplicity when it comes to finance?!