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15% to retirement works!

December 16th, 2016 at 10:41 am

I have a feel good story I thought I'd share. A friend of mine was telling me that saving 15% of her income was the easiest thing when she was working and that it did a lot of heavy lifting for retirement.

Well she started at costco at 18 and didn't go to college. She started saving 10% for the first 2 years then 15% from years 20-38, she only ones part-time now because of her kids. She maxed out at $50k/year and has always saved 15% of her income and she's 39 and has $300k in her 401k. She's now set for life even if she never saves again. All the early saving did it for her.

She said I always tell people starting out to save 15% of their income and it'll do it for them. But most people never do. She looked at me and I said "no worries we're fine."

We missed saving in our early 20s and so we had to save A LOT more money to make up for it. We're still socking it away because of it. But the compounding works!

So it doesn't matter what you make but what you save.

10 Responses to “15% to retirement works!”

  1. creditcardfree Says:

    So true! I know my husband and I started out with 10%. Now we are over 15%. It does add up!

  2. Petunia 100 Says:

    So true. I wish I had started in my 20s!

  3. LAL Says:

    CCF didn't you save for a long time because you used to work for a mutual fund company? So you've saved for a long time before getting into SA right? And that did a lot of the work.

    Petunia me too I wish we had saved earlier.

  4. NJDebbie Says:

    I contribute a total of $1350 a month which represents about 16% of my gross income. I wish I'd started much earlier but that was one of the trade offs of being a stay-at-home Mom in my twenties and part of my thirties.

  5. Kiki Says:

    I put in 15% right now but plan to increase it with the next two raises in 2017 and 2018. Both raises together are just under 3% so not a lot but I am making up for some lost time in school and with low paying jobs.

  6. FrugalTexan75 Says:

    I put in about 17% and then have an employer match of 9%. Before that though, I put away about 10 - 15% since I was in my mid-20s except a few year where I was going to grad school.

  7. VS_ozgirl Says:

    That's great to hear, gives us all hope!

  8. alice4now Says:

    Very encouraging story, thank you!

  9. rob62521 Says:

    Starting early certainly helps. I've been preaching that to all the younger teachers when I was working and they all told me that they needed that money now. I kept telling them every little bit adds up and compounding interest if their friend. One informed me half her salary went to paying her student loans and wanted to know what I did for my loans. I told her I didn't have any...between some scholarships and working during college and scrimping throughout, I graduated debt free. She looked at me like I was an alien. I asked her how much she spent going out and partying and she laughed and said a lot. I told her I didn't go out and I didn't party. I worked and studied and my snacks were saltine crackers and peanut butter and air popped popcorn and I bought some of that instant tea mix to mix with water from the drinking fountain. She then admitted that part of her loans were for other things then tuition and room and board. She then went back to school to get her master's and took out additional loans. She married this summer...fancy wedding...and she and her spouse just bought an expensive house. They were living rent free in a small house owned by his grandparents, but she wanted her own place. Bet I can predict where she will be in a few years and it won't be compounding interest on her retirement accounts...

  10. terri77 Says:

    I dodn't start @18, but have been pretty consistent at saving for retirement once I graduated college. I turned 39 two weeks ago & I have accumulated over $500k. Starting early works!

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