The rule of thumb for retirement planners, when asked how to save for a dignified retirement, is to put aside 20-30% of their working income for retirement.
I don’t know many people, these days, who can afford that on current salaries when you factor in cost of living and other expenses. If you have a very high income, then you can of course afford to put aside more and to actively invest.
So, it may be that when you ask yourself how much to save for retirement that you must put aside 20-30%, even factoring in supplemental retirement income like social security (government pension plans outside of the US), private or public sector pension plans, other annuity or investment income. You have to also factor in the likelihood that future tax rates may be higher than they are today, so one consideration now is are you using a tax deferred or an upfront retirement investment vehicle?
Diversifying Your Retirement Portfolio
I also would caution readers who are coming to grips with this situation to also diversify their investments between the risky high yield kind to the more conservative kind. Also consider working precious metals like silver and maybe gold into their portfolio.
Precious metals hold and store value for the long haul. Just make sure that you take delivery of the metal and store it securely without fanfare, so no one knows you have it.
Additional Streams of Income
Another thing that you can do to make sure that you have enough to retire on is increase your income. I know it’s pretty impossible to do that with just a regular job, unless you have a high earning job and know you’re going places with it. If that’s not the case for you, then strongly consider several possibilities:
- Get a second “moonlighting” job – these are low paying with unfriendly hours, but they can help to bring in that additional income. Trading time for money.
- Do part-time consulting if you have a skill that is marketable. Again, you are trading time for money, but this also has the advantage of giving you additional experience.
- Buy and sell things online. It can be a lot of work and also overheads like inventory storage, postage, etc. may hit hard on your finances. Consider selling other people’s products through affiliate marketing.
Consider Network Marketing (MLM)
Get into network marketing of some sort. Many MLM programs have high potential payoffs that can help you with an additional income. The issue is which ones to choose and you must stick with it and be consistent and persistent and not give up easily.
You should be grateful though that there are so many of these out there to choose from. There are traditional and online versions. Internet based businesses (MLM or Affiliate Marketing) offer the benefit of working from home and not having to approach family or friends for financial support.
Investing in a Dignified Retirement
When pondering how much to save for dignified retirement, you must save a substantial portion of your current income OR make enough extra to offset or exceed this, which gives you more for saving and investing.
You should diversify what investments that you have in order to minimize risk. You should consider the possibility of opening up extra income streams so that how much to save for retirement becomes an academic question because you are covered.
There you have it. I believe its sound advice and well worth considering. Only YOU can take control of your future needs and make sure that they are met. Seek advice from a professional if you are not sure about what to do. Do not depend on others or the government because neither will cover your needs, unless you’re a member of Congress, or a member of the political governing class, but that’s another article altogether.