Planning for retirement is no easy task. And when it comes to financing yourself and your family, you may wonder, how exactly you’re supposed to plan for it, especially when you are retired. If you want to have a financially stable retirement (the way I and most people do) you will have to start saving for it early. In easy words, you have to separate a fixed percentage of your income every month and add it to your retirement savings.

You need to do this before you start spending on anything otherwise you’ll end up spending until the last coin and have nothing left to save! That’s a mistake many people make. The best way to save is to automate your savings so that after you’ve decided on how much you want to save each day or month, the fixed amount is automatically sent into your savings account from your current account. So, how much do you need to save? If you are looking for a general solution that works for everyone- sadly, there isn’t any. Many experts suggest that saving 10% is enough, while many argue it’s not. In my opinion, only you yourself can be the best judge about how much you should be saving since you know best how much you will need for your future.

If you still think you want to follow a thumb rule, let’s see why it should and should not work. First of all, how much you need to save depends on how much you spend/plan to spend. This means, if you are someone with a lower income than average who is used to a lower standard of life, the money you’ll receive from Social Security will compensate much of your income, hence saving 10% or even lesser should be enough.

However, for people who are attached to a more lavish life and wish to continue living the same way even after retirement, saving just 10% will not be enough. Even though Social security will give them the same amount of money, it will not fully compensate the same percent. Secondly, when did you start saving or plan to start? And how long do you plan on working? The earlier you start, the lesser you have to separate.

But, that also means you have to be mature and responsible from a young age, and will not be having the same degree of carefree, joyous youth everyone dreams of having. After all, saving money is not for the weak-hearted! Moreover, the longer you work, the more you can save but there are some other factors which you need to keep in mind. Still, if you have a big family you have to take care of, working in your old age is not an option but a necessity; therefore you will not be saving much then. In addition, you also have to take into account your profession too. If you’re a construction worker, saving 10% now will not be enough for you as you will not be able to work to your full potential for much longer. If your job is uncertain or unreliable, like investment banking, 10% will not be enough for you either. Ultimately, how much you need to save depends on you and your life. Think about your responsibilities and duties, and envision what type of retirement life you want to have.

If you want an adventurous life, looking forward to traveling the world with your partner after your retirement, or want to be able to support your kids throughout their whole higher education, you should definitely save more than 10% of your income. Studies show that if someone is able to save 20% or even 15% of their income, they will have nothing to worry about after retiring! But, if you’d rather live your life at the moment, and don’t mind a not-so-fun retired life, you can set off to those adventures you planned for and quit worrying about savings. However, do keep in mind that you will eventually retire and hence, even saving as little as 5 or 7% of your income will come in handy in the future.