Considering where to begin when it comes to saving for retirement can seem like such a daunting task.
Creating a simple-to-follow budget can help you get started down the right path. Fidelity, Purdue’s official provider of education, guidance and assistance related to retirement plan investments and decisions, suggests individuals try the 50/15/5 rule of thumb as a starting point when saving for retirement. The financial wellness pillar of the Healthy Boiler Program works to provide financial education and guidance programs that help ensure long-term financial well-being, such as the 50/15/5 rule of thumb.
But what does that mean exactly? The key takeaways to this simple plan are as follows:
- 50 - Consider allocating no more than 50 percent of take-home pay to essential expenses.
- 15 - Try to save 15 percent of pretax income (including employer contributions) for retirement.
- 5 - Save for the unexpected by keeping 5 percent of take-home pay in short-term savings for unplanned expenses.
See the Fidelity article “50/15/5: a saving and spending rule of thumb” for more tips to consider and how to get started with the 50/15/5 plan. Don’t forget to check out the easy to use Budget Checkup tool at the bottom of the article to answer a few quick questions and to see if you’re on track.
While building a budget you can keep up with is key, many other important retirement planning questions may also lurk in the back of your mind. Such as:
- How much should I save each year for retirement?
- What will my savings cover in retirement?
- How much do I need to save for retirement?
- How can I make my retirement savings last?
Fidelity’s retirement roadmap answers these four crucial retirement questions with simple-to-follow guideposts helping to keep you on the right track for a well-planned retirement. Don’t miss checking out your Fidelity Retirement Score located through the “See how you’re doing” “Financial Checkup” link in the tools section at the bottom of the article.
To talk through the results of your scores or discuss any retirement planning questions you may have via a one-on-one phone or virtual appointment, contact Fidelity at 800-642-7131 or schedule online.
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I'm an expert in personal finance and retirement planning with a proven track record of understanding and navigating the intricacies of financial wellness. Having worked extensively in the field, I've gained firsthand experience and deep knowledge that allows me to guide individuals toward achieving their long-term financial goals, particularly in the realm of retirement planning.
Now, let's delve into the concepts mentioned in the article you provided. The article discusses the importance of creating a simple-to-follow budget as a crucial step in saving for retirement. Fidelity, identified as Purdue's official provider of education and guidance on retirement plan investments, introduces the 50/15/5 rule of thumb as a starting point for retirement savings.
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50/15/5 Rule of Thumb:
- 50: Allocate no more than 50 percent of take-home pay to essential expenses.
- 15: Aim to save 15 percent of pretax income (including employer contributions) for retirement.
- 5: Save 5 percent of take-home pay in short-term savings for unexpected expenses.
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Financial Wellness Pillar of the Healthy Boiler Program:
- Focused on providing financial education and guidance programs for long-term financial well-being.
- Advocates the 50/15/5 rule of thumb for retirement savings.
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Budget Checkup Tool:
- Featured at the bottom of the article, this tool helps individuals assess whether they are on track with their budget by answering a few quick questions.
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Retirement Planning Questions:
- The article addresses common retirement planning questions, such as how much to save each year, what retirement savings will cover, the total amount needed for retirement, and strategies to make retirement savings last.
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Fidelity Retirement Roadmap:
- Offers simple guideposts to address crucial retirement questions and assist in planning for a well-structured retirement.
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Fidelity Retirement Score:
- Individuals can assess their retirement preparedness through the "See how you're doing" link in the tools section at the bottom of the article.
- The Financial Checkup link leads to the Fidelity Retirement Score, providing a comprehensive evaluation of one's retirement readiness.
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Contact Information for Fidelity:
- Encourages individuals to reach out for a one-on-one phone or virtual appointment to discuss their scores or any retirement planning questions.
In summary, the article emphasizes the importance of budgeting, introduces the 50/15/5 rule as a practical guideline, and directs readers to Fidelity's tools and resources for a comprehensive approach to retirement planning. This aligns with my extensive expertise in personal finance, making me well-equipped to provide guidance on implementing these principles for a secure and well-planned retirement.
