My Financial Philosophy



In today's society where recieving a pension at retirement is uncertain and Social Security is far less than the amount we need to live on after retirement; it is very important to plan ahead. It is very important to start saving for retirement as soon as possible, to ensure that you will be able to retire comfortably. In fact, the sooner you set up a savings plan, the more you'll have at retirement.

According to the NJ Department of Health Services, the average life expectancy for a male is 75.5 years. With the average retirement age at around 67, it is necessary for a retiree to comfortably support himself for at least 8 years. If you start your career right out of college, you will enter the workforce around 22; and if you start saving for retirement as soon as possible that will give you around 45 years to build up a nice nest egg. Based on an average inflation rate of 3% annually (according to the US Census Bureau), if you start out with a salary of $45,000, in 45 years you will be making approximately $170,000. According to, a retired individual may need as much as 70% of his pre-retirement income to live comfortably. However, if you wait for as little as 10 years before starting to save for retirement, you may only be able to live on less than 53% of your pre-retirement income. Moreover, this percentage drops dramatically if you wait even longer. So, my financial philosophy is to not wait, and start planning and saving immediately.

My reccomendation for saving for retiremnt, is to open a tax-deferred Roth IRA and contribute as much as the law will allow to this plan. If you put $4000 a year into this IRA plan for 45 years, with compound interest, you will be able to collect close to 100% of your pre-retirement income upon retiring.

View My Slideshow Presentation on Saving for Retirement

Links to Financial Institutions

Kiplinger's Personal Finance Magazine

MSn Money - Investor Home

Social Security Administration

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