There is no guesswork with "rules of thumb" nor "benchmarks". You'll start contributing with confidence.
This one mathematical tool solves two vexing problems at the same time, because they turn out to be two aspects of the same thing.
By designing this tool to find a range of solutions that all satisfy a given salary replacement goal,
each solution being a combination of a salary contribution percentage
and a minimum investment yield needed for that contribution,
you get maximum flexibility to find a "sweet spot" that works for you.
At the same time, because all calculated solutions meet the goal you have set, no matter which solution you select, you know you will avoid the very real danger of accidentally setting up contributions and investments which fall drastically short of supporting you in retirement, for lack of any specific goal by which to judge it.
Higher contributions as a percent of your salary mean you can reach your goal despite a lower investment yield (and potentially less risk), and vice versa. If you want to contribute less, you’ll need a higher investment yield (which might br hard to find, or which could expose you to more risk). But the problem is that the lowest yielding, easiest to find and understand investments might require you to contribute budget-busting amounts of your salary to reach your goal, and that is the tension of this process!
In the "CONCEPTS & EXAMPLES" help topic, we work through a practical example showing how and why this can matter so very much.
Goal-setting is critical.
Our working assumption is that your retirement goal will be a percent of your pre-retirement salary,
entered at: "Goal Salary Replacement%".
We provide a default goal of 75%.
This is a good starting point to give you perspective about the scope of the task ahead of you.
You will want to put some thought into your needs and desires, and adjust this goal accordingly.
Without setting a goal, you have no way to decide whether what you're doing is too little, too much, or about right!
Having enough for a comfortable retirement will require a good deal of thought and self-discipline – and the sooner you start, the better.
The particulars are very individual: your age, your previous savings, your investment knowledge, your desired retirement age, your expected lifespan, and more.
An Ongoing Education and Improvement Process.
The more you put in to this tool, the more you’ll get out.
To reflect your personal situation, you need to do the homework to determine input values that make sense for YOU.
Try it now, then try it again after spending time refining your budget including an estimate of all your TAXES as part of your expenses.
As you learn more about investments or your personal circumstances change, your inputs can change again.