From our previous post, we did the math and concluded that a middle middle-class earner will need at least 11M by retirement to live comfortably without income. So let's break this down and do more computations to know how much we would need to save by age.
Some assumptions:
Zero savings on each starting age
6% growth on investments
Age of retirement is 60
Annual Contribution to your retirement fund (approximated to the nearest thousand):
I've also broken it down to monthly contributions (approximated to the nearest hundred):
Based on the illustrations above, to get 10M by retirement, if you start by the age of 20, you're only required to contribute at least ₱5,100.00/month to your investment til' the age of 60. But if you only start saving by the age of 40, it will require you to save ₱21,400.00/month to hit that same target. For 20M, if you delayed saving for your retirement til' you are 50, you will need to save ₱120,000.00/month vs saving ₱20,000.00/month if you started 20 years ago.
I've written a few blogs on where you can put your money for retirement that can potentially give you a 6% return on your investments:
This is why starting early is the key to hit your target numbers. The longer you delay saving up, the harder it gets to hit the targets because it will require much more. We haven't even talked about how each age group will be in different stages of their lives and careers, which will affect savings rate.
Time is our friend. Use it wisely.
Comments