How Much do you Need to Save for Retirement? Here are Some Guidelines
Worried about your retirement? Not sure how much you should be saving? Fidelity Investments has released the first ever international retirement savings guidelines to help U.S. and overseas companies and employees figure out how much money needs to be saved for retirement.
The guidelines offer a suggested annual savings rate and savings milestones based on a person’s age for each country. They also include a target income replacement rate and a probable sustainable withdrawal rate, which represents the suggested amount of money workers can withdraw from their savings each year without running out of money in retirement.
Workers in the U.S. should aim to save 15 percent of their annual salary each year and aim to save 10 times their salary by retirement, which will replace 45 percent of their pre-retirement income. The withdrawal rate is 4.5 percent.
In the UK, workers are suggested to save 13 percent of their annual salary to have saved seven times their salary by retirement. That replaces 35 percent of their pre-retirement income with a five percent withdrawal rate.