Although it is well known that setting aside money during one’s career will allow for a comfortable retirement, it is not as clear just how much one should aim to save.
David Bach, author of “The Automatic Millionaire” and “Smart Women Finish Rich,” joined CNBC’s “Make It” to share his thoughts on how one should gauge their annual money-saving.
Bach shares a simple formula originally created by retirement-plan provider Fidelity that works by multiplying one’s starting salary by a factor of “X,” depending upon age.
Fidelity’s formula is as follows:
Age 30: Have the equivalent of your starting salary saved