What Percentage of Your Income Should You Save?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Saving for Retirement

  • Guideline: Aim to save at least 15% of your pre-tax income annually.
  • Example: If you earn $50,000 yearly, try to save $7,500 for retirement.

Use The Annuity Experts retirement calculator to plan for your future

Saving for a Rainy Day

  • Guideline: Have 3-6 months’ worth of living expenses in an easily accessible savings account.
  • Example: If your monthly expenses are $3,000, save $9,000-$18,000 for emergencies.

Potential Disability from a Job

  • Guideline: Consider saving an additional 5-10% of your income for potential disability, especially in high-risk jobs.
  • Example: On a $50,000 salary, set aside $2,500-$5,000 yearly for this purpose.

Income Protection Insurance or Disability Insurance

  • Insurance Cost: Usually 1-3% of your income, depending on the policy and risk factors.
  • Example: For a $50,000 income, this could mean $500-$1,500 annually for insurance premiums.

Income Savings Breakdown

Income RangeRetirement SavingsRainy Day FundDisability SavingsInsurance Premium
$30,000 – $50,00015% ($4,500-$7,500)3-6 Months’ Expenses5-10% ($1,500-$5,000)1-3% ($300-$1,500)
$50,001 – $75,00015% ($7,501-$11,250)3-6 Months’ Expenses5-10% ($2,500-$7,500)1-3% ($500-$2,250)
$75,001 – $100,00015% ($11,251-$15,000)3-6 Months’ Expenses5-10% ($3,750-$10,000)1-3% ($750-$3,000)

Conclusion

Your savings strategy should include retirement, emergency funds, and potential disability, especially in high-risk jobs. Factor in insurance premiums for income protection or disability insurance. Tailoring your savings to your specific needs and circumstances is key. For a personalized savings plan and more financial advice, contact us today for a free quote.

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*Disclosure: Some of the links in this guide may be affiliate links. I may receive a commission at no cost if you purchase a policy. It helps us keep the lights on!

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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