ECONOMICS
MONEY MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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3%
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10%
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20%
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15%
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Detailed explanation-1: -The 10% savings rule is a guideline that suggests setting aside 10% of your gross income for retirement and other important savings. It’s more of a personal commitment than an actual rule. Establishing a personal budget that sets aside 10% of your gross income every paycheck is a way of prioritizing savings.
Detailed explanation-2: -At least 20% of your income should go towards savings. Meanwhile, another 50% (maximum) should go toward necessities, while 30% goes toward discretionary items. This is called the 50/30/20 rule of thumb, and it provides a quick and easy way for you to budget your money.
Detailed explanation-3: -If you consistently put away 10% of your income, the actual amount you contribute each month will grow as your salary rises, which can help you build up your retirement fund more quickly. Even if you don’t earn much now, save what you can and work your way up to 10 or 15%.
Detailed explanation-4: -But how much is enough? Our guideline: Aim to save at least 15% of your pre-tax income1 each year, which includes any employer match. That’s assuming you save for retirement from age 25 to age 67. Together with other steps, that should help ensure you have enough income to maintain your current lifestyle in retirement.