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Chapter 5. Developing Your Retirement Pl... > Eight Steps to Financial Independenc... - Pg. 60

Developing Your Retirement Plan 60 John looks at the chart and finds out that for 26 years at an 8 percent rate of return the savings factor is 0.013. He multiplies his financial need ($689,475 in box J) by that factor, as shown in Figure 5.13. He finds out that he should be saving $8,963 every year for the next 26 years. He divides that figure by his current salary-- $50,000--and it works out to be about 18 percent of his pay every year between now and retirement. Ouch!