Q: I’m 37 years old, just started my retirement plan, and need to know how much I will have when I retire. I’m saving 5% of my earnings biweekly. What percentage do I need to contribute to save $3,000 a year?
– M. Hall, Via the Internet
A: For 2005, the law allows you to save as much as $14,000 in a 401(k) or 403(b) retirement savings plan. But if your savings goal is $3,000 a year, saving a percentage of your salary won’t be your main concern.
To meet your goal, you’ll need to save $115.39 from each biweekly pay period. To project what saving $3,000 a year could yield for your retirement, we went to FundAdvice.com and used one of its investing calculators (www.fundadvice.com/tools/calcu lators/). Using the Amount Saved Calculator, we came up with the following: If you plan to save $3,000 a year until you retire in another 30 years at age 67, and your investments earn 7% interest per year, you could expect to have $295,330.87 upon retirement. That probably will not be enough for you to live comfortably on in 2035.
To find out how much you will actually need to retire, use the retirement calculator at www.retirementplan. about.com, into which you should enter your current salary, projected raises, and number of years until you plan to retire. This will give you a better idea about what you’ll need in order to live comfortably upon retirement.