Martin Lewis shares 'scary' rule of thumb for how much you should be saving
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Among this advice, he also looked into how much we should be setting aside for the Gold Coast of retirement – and it’s certainly sobering.
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for a stable retirement income
‘So kick off at 20 and it’s 10% (this includes employer’s contributions), at 40 it’s 20%.’
By the time you're 48, the government expects you to have stumped up forty grand and invested an extra eight thousand into your superannuation this year alone. On the other hand, a 20-year-old on an average wage of twenty-two thousand quid has a whopping twenty-three fifty to save.
Take into account that the specific dollars-and-cents amount will fluctuate up or down along with your income, and what you chip in yourself will vary depending on how much your employer contributes.
However, this exercise provides a worthwhile – if stark – insight into what happens when you chose to ignore the problem.
‘Don’t stress, nearly everyone misses out,’ Martin said. ‘The real thing to get is that the earlier you start, the better, as you've got more time for benefits to build up.’
Highlights that 'most people aren't able to chip in enough at the start to follow the "half your age" rule, so start with whatever you can.'
It's also advised to earmark a specific portion (rather than a set monetary amount) each month, so you don't fall behind as your earnings go up.
And Martin offered a tip for newsletter readers as well: 'Every time you get a pay rise, put a bit of it into your super early on before you get too accustomed to the increase.'
Getting in front of something is a real thing, so getting a head start is a great way to trick yourself into being responsible.
Splashing out on things now's a necessity, but just think how stoked 'future you' will be if you keep an eye out for them as well.
Are you keen to hear a yarn?
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