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How Much Should You Save? Meet Your Retirement Goals with These Tips

How Much Should You Save? Meet Your Retirement Goals with These Tips

Kim Lankford

And that $2,400 doesn’t lower your paycheck dollar for dollar either, since you’re investing the money pretax. If you’re in the 25 percent bracket, investing $2,400 would only reduce your take-home pay by $1,800 for the year. So it actually would cost you just $150 per month to end up with a $3,600 contribution every year. Start at age 30, and you’d have about $670,000 by age 65.

If you can also afford to invest $200 per month in a Roth IRA, your total savings rate would rise to 15 percent of your $40,000 salary. Continue to invest that much for 35 years, and you could end up with more than $440,000 at age 65, totally tax-free under Roth rules. Add the two together, and you’d have more than $1.1 million for retirement.

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