Quick question: Would it be easier for you to save 20% of your monthly income, or to live on 80% of your monthly income?
In case you answered, “Save 20%,” you are just average (sorry for being so blunt) and might be suffering from the Loss Aversion Bias.
In case you answered, “Live on 80%,” you belong to the vast majority of people who took part in that survey.
In case you answered, “Neither,” it is time for you to crack your head and find ways to save more for retirement.
In case you answered, “Hold on, both options are exactly the same,” you are most likely in control of your mind and are not easily tricked by biases.
And in case you answered, “What? Saving only 20%? I already save much more than that,” then you are a hero and a role-model: for me and many others.
Don’t feel like a hero? I assure you that “feeling-like-a-hero” will set in latest when you retire and start to enjoy your comfortable nest egg without regrets.
Sometimes, a change in perspective helps one to find the required motivation to overcome procrastination.
Many people struggle to save even 5% of their income. With an average workday of 8 hours, they would work only 24 minutes a day for their retirement.
That’s ridiculously little, don’t you agree?
And now, let’s be frank. What percentage of your monthly income are you putting aside regularly for retirement?
Let us know and drop that figure into the comments box below, so that we can gather a nice benchmark.
Ok, I admit that I have not provided a firm answer to the above question as to whether you do save enough. Actually, that is very difficult and subjective and is dependent on the life-style you strive for after your corporate life.
What could help is punching in your own personal financial targets into one or many of these comfy calculators in order to see how much you should save monthly or yearly now.