You should aim to invest 25% of your gross income for retirement. This includes money saved in your 401(k), Roth IRA, taxable brokerage account, HSA (if saved for retirement), pension, and other retirement savings vehicles like a 403(b) or 457 plan. If you make under $100,000 (single) or $200,000 (married), you can also include any employer contributions to your retirement account or pension in your savings rate.
If you start young, you have the potential to build significant wealth and set yourself up for a successful and meaningful retirement. Investing just $95 per month starting at age 20 will grow into $1,000,000 by the time you turn 65, at an annual growth rate of 10%. This is the power of compounding interest.
Check out the video below to learn more about why that 25% investing rate is so important and how to reach it without feeling broke.
