How much should one save?
Rose Miller, grants manager at the JN Foundation, who also leads the JN BeWi$e financial empowerment programme, advised that saving 10 per cent of one’s monthly salary is ideal.
She further recommended that a benchmark to adopt is that persons in their 20s should aim to save 25 per cent of their overall gross salary. “That includes retirement account contributions, matching funds from your company, cash savings or money you have invested elsewhere,” she explained.
Miller further advised that by age 30, one should have the equivalent of one’s annual salary saved.
“Therefore, if you earn $1 million a year, aim to have $1 million in savings when you hit 30,” she outlined.
The Multiplier Effect
By age 35: Have twice your annual salary saved. By age 40: Have three times your annual salary saved.
By age 45: Have four times your annual salary saved.
By age 50: Have five times your annual salary saved.
By age 55: Have six times your annual salary saved.
By age 60: Have seven times your annual salary saved.
By age 65: Have eight times your annual salary saved.
“While this may sound intimidating today, if you were putting aside money to work for you, starting in your 20s, it’s not as difficult as it may seem, due mainly to the power of compound interest,” Miller stated.