The new recommended amount to save is 15% of your pay. For a while 10% was the recommended amount. Yet the question still remains for people who are barely making ends meet or who aren’t in the mindset of saving for the future.
In an ideal world people would not have a large amount of debt to repay and would be able to just focus on their current expenses. Life gets in the way and sometimes debt does accrue. Still putting something toward the future even if it is less than you want to save is better than saving nothing. Those with debts that need to be repaid shouldn’t give up on trying to save something. If your employer offers matching 401(k) funds or match up to a certain percent, don’t let the “free” money go down the drain.
If you are employed or employed after a period of unemployment, get back into the habit of saving again, but be realistic, if you have to drive to your new job instead of taking public transportation or buy new attire of equipment for the position, then start saving more moderately until you figure out how much you can spend – especially in long term vehicles. You can always increase your savings after a few paychecks. Waiting longer than 3 paychecks may make you too accustomed to this extra cash and the temptation of spending the money that you have left over.
Heavily in debt? Then 15% may be too much until you pay off some debt. Don’t give up on saving even if you are in debt, save 5%. As your debt decreases, then increase your savings and investment.
Consider this… no one has ever said they saved too much for retirement.
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