Should I save money for retirement on my own too?
Yes. Saving money for retirement is not only a good idea, it’s necessary. You see, Social Security was never meant to be the only source of income for people when they retire. Social Security replaces about 40 percent of an average wage earner’s income after retiring, and most financial advisors say retirees will need 70 percent or more of pre-retirement earnings to live comfortably. To have a comfortable retirement, you’ll need much more than just Social Security. You’ll also need private pensions, savings and investments.
If you haven’t begun saving for retirement, now is a good time to start—no matter what your age. Retirement may seem like a lifetime away, but it’s in your best interest to begin saving now. Through the “magic” of compound interest, a 25-year old who begins saving $100 a month and earns a modest 5 percent interest will have more than $150,000 at age 65. Save $200 a month and you’re looking at more than $300,000. Experts agree that saving when you’re young will make a world of difference when the time comes to draw on your retirement savings.
A great way to start figuring out how much you will need for retirement is to use our online Retirement Estimator. If you've worked 10 or more years, the Estimator offers an instant and personalized estimate of your future Social Security retirement benefits based on your earnings record.
We encourage saving for retirement, but there are reasons to save for every stage of life. Whether you are looking for information about buying a home, balancing your checkbook, or investing in your 401(k) plan, a great place to go for help is www.mymoney.gov (the official U.S. government's website dedicated to teaching Americans the basics of finances).
The Ballpark Estimator is another excellent online tool. It makes complicated issues, like projected Social Security benefits and earnings assumptions on savings, easy to understand.