Retirement Saving Strategies Explained | Must-Know Tips for Investing Wisely

Saving for retirement is an important lifelong goal that should not be taken lightly. It requires a savvy and thoughtful approach to ensure your retirement funds are well-managed and secure. Fortunately, there are some tried-and-true strategies you can use to maximize your savings without overcomplicating things. In the video below, you'll explore a few saving approaches for investors looking to bolster their nest eggs and enjoy a long, comfortable retirement.

Video Transcript:

Meet Emily. Emily just got her dream job and she's thrilled. Even better. The company she's working for offers a lot of benefits like health insurance and a retirement savings plan. Emily understands the value of most of those benefits, but when it comes to saving for retirement, she has no idea where to even begin.

So where does Emily start? Well, we know that on average workers need to look to their retirement savings for about 35% of their income in retirement. To reach that target, assuming that savings begin at age 35 and end at 65, the average savings rate required is about 15% of your earnings. Saving 15% for retirement may sound like a lot, but don't worry, it can be done gradually.

Emily learned that her employer offers a company match to her retirement savings and will match half of everything. She saves up to 6%. So she starts her plan at the 6% savings rate, and with the 3% total match from her employer, she's already at 9%. Emily is feeling great about taking the first step in saving toward her future.

Nicely done, Emily, but we are not done yet to help Emily meet her long-term retirement goals and balancing the bills and needs she has now. We recommend that Emily increase her savings rate by 1% every year until she hits her 15% target. Raising her savings rate by 1% each year helps to make the increase manageable for her budget and will make a significant difference in the long run to the lifestyle Emily can have come retirement.

Here's the payoff: If Emily follows this strategy and then continues to contribute at 15%, she'll have over 2 million saved up when she's ready to retire. Now compare that strategy to Emily's coworker Brian, who saves at the 6% to get the full company match, but stays at that same savings rate until he retires.

He'll end up with just over half the money that Emily will have. That's noticeable. So learn from Emily and know that there is no better time than today to start saving for your future.

Disclosure: This is a hypothetical example and is for illustrative purposes only. No specific investments were used in this example. Actual results will vary. Past performance does not guarantee future results.