How much do you know about retirement planning? On this episode of Saving the American Dream, we’re testing your knowledge.
At what age should people start saving for retirement?
- A) When you begin working
- B) After you buy your first home
- C) When you pay off all your debts
We can eliminate C right off the bat, especially when we look at the cost of housing. We see quite a bit of people who wait until after they get their first home to start putting away money aggressively.
But the correct answer is A, because of the impact of compound interest. When you start very early in your working career, in your 20s, it can be extremely powerful.
Which of these is the best estimate of how much income you’ll need in retirement?
- A) 50% of your current income
- B) 85% of your current income
- C) 100% of your current income
- D) None of the above
We’re going to give you two correct answers here. C is a good estimate. You should be aiming to get to 100% of your current income. We could also make an argument for answer D.
On today’s show, we also quiz you about what retirees fear the most. Listen to the full podcast or use the timestamps below to jump to a specific section.
Navigating the Show
[2:36] – Start saving
[8:08] – Best estimate
[12:34] – Fear the most
[15:37] – Diversified plan
[21:30] – Withdrawing money
[25:23] – Mailbag: Rate of return
“I bet you can find at least $100 a month, $25 a week that you could put away, even if you’re just starting small.”
– Michael Schulte