LOS ANGELES, Calif. (FOX 11) - Winnie Sun, "The Wealth Whisperer" and Twitter's top financial influencer, joined us on Good Day LA with real action you can take to catch up in your savings for retirement.
Two times your income might seem like a lot for young people because they often live paycheck to paycheck and put off saving – but the truth is most people have no idea how much they should save.
What should your number be?
BY THE TIME YOU ARE READY TO RETIRE YOU SHOULD HAVE SAVED:
A.) $250, 000 to $750,000
B.) 8 to 10x your income
C.) It depends on whether or not you own a home
D.) 1 million or more
If you save 8 to 10 times your income – you should be able to retire and have the same lifestyle you have now, Winnie said. If you are not even close or haven't even started, the most important thing is to stop regretting, stop thinking about it and take action.
So what should you do if you're young and haven't really started yet? Winnie says reward yourself first and automate your savings.
-Always squirrel away half of any surprise money birthday money, gifts, bonus, tax refund – don’t plan those as income
-Get comfortable with long term investing
-Use the three bucket rule for investing:
BUCKET 1: 401K IF YOUR WORK OFFERS –
Make sure to max out to ‘at least’ what your employer will match
BUCKET 2: ROTH OR TRADITIONAL IRA
Divide the number up and start investing in January. This is a small but mighty strategy.
BUCKET 3: FUND YOUR EMERGENCY/SAVINGS ACCOUNT
Even $20 a month is a win. For kids, consider a college savings account.
TARGET FOR SAVINGS: 25%
BOTTOM LINE: The most important thing is that you get started now – because whatever you can save will grow over time and will be there for you in retirement!