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You’ve probably been told a million times that you should be saving money for retirement.

But when you’re decades away from retiring, it’s easy to prioritize more immediate financial goals ahead of this one. In fact, nearly 60 percent of 18- to 34-year old investors say they’ve already withdrawn from their retirement accounts, according to E*Trade Financial research.

Putting off saving or raiding your retirement fund early can be tempting, but it can have big consequences. That’s because setting yourself up for a comfortable post-work life really comes down to two things: investing as early as possible and leaving your money alone to grow.

It helps, too, to have a good sense of how much you need to save now in order to support the life you want later. Here’s how to determine your retirement goal, pick the best retirement account for your needs and devise an investing strategy that’ll serve you for decades to come.

Calculate your retirement savings goal

There are two easy rules of thumb you can follow when it comes to saving for retirement: One is to plan to invest 10 to 15 percent of your income for retirement, and the other is to aim to save enough to cover about 80 percent of your pre-retirement annual income.

But without a personal retirement savings goal in mind, it’s hard to know if you’re on the right track to fund the kind of retirement you want.

To determine how much to save for retirement, start by thinking about your future. The average life expectancy is about 79 years, according to the CDC’s National Center for Health Statistics, so if you want to retire at 65, plan for your money to last at least 15 years—and possibly much longer, depending on your lifestyle, health and family history.

You’ll always want to estimate your annual living expenses, including taxes, housing, food and health care. According to the Bureau of Statistics, “older households” (those run by someone 65 or older) spend an average of R144,000 per year. Of course, that can vary according to where you live and other factors—for example, you may have a mortgage now, but will it be paid off by age 65?

Then think about any extra costs you’ll want to budget for, such as travel, gifts, hobbies and entertainment. Add those expenses to your annual total, then plug that number into an online retirement calculator that can show you how much to save monthly in order to achieve your goal.

Commit to saving for the long term

Whatever account you choose, it’s important to make a habit of investing and stay committed to your long-term goals. The most successful retirement savers and investors stick to a few basic rules of thumb:

 

Diversify. Avoid the temptation to put all your (financial) eggs in one basket. On the a basic level, a well-diversified portfolio should include a mix of both shares and bonds. One easy way to accomplish that is by investing in funds, like exchange-traded funds (ETFs) that trade like shares, which allow you to invest in literally hundreds of different shares and bonds at once. This way, if some of your investments are down, others should hold you up.

 

Keep a close eye on fees. Look for low-cost funds if you’re choosing your own investments, and read the fine print on any brokerage or investment agreements, including those provided by your employer. You want the money you’re socking away to go toward your own retirement, not to exorbitant fees.

 

Stay the course. Retirement is a long-term goal, and investing for it is a long-term process. Share prices go up and down all the time, but those who remain committed have historically experienced higher returns. Don’t give in to knee-jerk reactions; practice patience and stick with your plan!

Retirement

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