Not looking for a detailed plan, just a quick
August 3, 2012 8:29 AM Subscribe
Saving for retirement - the advice and calculators out there are too complicated and I constantly question my assumptions. Is there a good rule of thumb to use until I visit an advisor?
My fiancee and I are in our late 20s, and we’re looking at our retirement savings. We are going to find a fee-only financial advisor this fall to make sure we have ourselves on a good path. But in the meantime, I'm seeking a rule-of-thumb (hopefully to put our minds at ease more than anything else, or maybe to give us a target until we get some professional advice).
I realize that there are lots of variables that go into retirement planning, especially at our age. How much do we make? How much do we spend? When do we want to retire? Do we want to travel in retirement? Will we have kids? etc, etc. But honestly, that’s why I’m seeking a rule of thumb - there are too many unknowns, and honestly I find some of the questions suspect because they sound like they were just dreamt up by the financial services industry to get us to invest more money.
I've done quite a few online simulators, and I had a commission-based advisor do a simulation too (eh, it was free and we didn't make any decisions based on it). But I have no idea how to evaluate whether my assumptions are any good, so I don't find them to be helpful in planning my savings. That's why we're going to an advisor, but in the meantime I'd like to know if there's a quick rule to apply.
So is there some kind of simple guideline? Something like “If you put away 5%/10%/15%/20% of your income in an untouchable retirement fund, you’ll probably be alright (depending on your particulars).”
I'm not looking for something to guide my every saving action, just a general "do this and you'll likely be in the ballpark" rule.
This is not a general "how to save for retirement" thread. That's been done many times before, so leave out anything besides "how much to save" rules of thumb. Here are examples of things that have been said elsewhere and don't need to be rehashed:
-Max out your 401k/IRA
-Always get the highest possible match from your employer
-Invest in index funds / etc