Anyone who has worked all their life wants to have enough money when they retire. Our example calculation shows how much 40-year-olds have to save in order to maintain their standard of living in retirement.
By Selma Schmitt
Many people in their 40s have better things to do than worry about retirement: they are advancing their careers, perhaps buying a property, or are busy raising their children. Maybe they are also planning a trip around the world and spend every free minute researching possible travel destinations. Retirement, which (feels) still a long way off, is not necessarily what they want to deal with. Under no circumstances should you ignore the topic.
You cannot maintain your standard of living in old age with the statutory pension alone. Additional retirement provision is required – the earlier, the better. Because over long savings periods, savers benefit from the compound interest effect: If interest is automatically reinvested, the investment amount increases in the following year and with it the interest on it – the compound interest. Stock and bond funds do not earn interest, but provide an annual return. Here too, the investment contribution multiplies over a long investment horizon. This means savers can save a fortune with even small investments. In this article we have summarized which retirement planning strategies are best suited at which age.
Source: Stern
