How Much to Save Monthly - Savings and Investing For Retirement - How Much Time Do You Need?

When folks ask the question of how much to save monthly for retirement, a house or college for their children, it can get a little confusing. Try using a time value calculator (one can be found easily on the web) for determining the amount of money you'll need to save for the future. This is a good tool for determining long term savings goals. Only you can determine your actual retirement or savings needs. Be realistic about the total amount of your savings goal and the total number of years you have to save. You will also need to consider the future value of money, you need to out pace inflation for your money to have any buying power when you finally reach your goal. The average rate of inflation over the past 20 years is about 3%. Consult a financial planner for all the right tools to determine your best plan for a long term goal.

Let's now take a look at a savings scenario. If you earned 10% on an investment for 40 years and continued to invest $160 a month, your total savings plus gains would be just a little over $1million. Of course most savings plans won't give you that kind of return, in most cases a mutual fund will give you the type of investment gain you are looking for. If you cut the time for savings or investment in half, using the same 10% rate of return and the same monthly amount of $160, after 20 years your total savings plus gains is only $122,000. You would need to save over $1300 a month to get the same result. If you wait just 5 years and save for only 35 years, you would then need to invest over $260 a month to reach $1million. There is a huge benefit to getting an early start. Don't run out of time before you determine how much to save monthly for retirement. The longer you wait the less money you'll have when that day comes. If you wait too long you'll need to save more, or continue to work past the usual retirement age.

I suggest trying your own calculations to determine your needs. Do what ever you need to do to reach your goal, even if it makes you a little uncomfortable, you'll be glad you did. Having enough money for your golden years is very important for a quality lifestyle. Find the best type of savings or investment to meet your needs and think of your retirement investment or savings as a long term plan. Good luck and good savings.