This Is the Minimum Suze Orman Thinks You Should Be Investing for Retirement

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  • Suze Orman believes you should invest a minimum of 10% of your income for retirement.
  • Ideally, she believes you're better off putting away around 15%.
  • She says you can work up to this by increasing contributions by at least 1 percentage point.

Are you meeting Suze Orman's recommended minimum retirement investment?

Putting money into a 401(k) or a tax-advantaged brokerage account for retirement is important. Since Social Security only replaces 40% of pre-retirement income, you can't count on it as a sole support source. You are going to need some extra money to make sure you have enough cash in your bank account on an ongoing basis to afford the necessities and perhaps even some retirement luxuries.

But how much should you actually save in order to have a nest egg that can supplement Social Security and allow you a reasonable quality of life in retirement? Finance expert Suze Orman recently laid out the numbers, suggesting both a minimum retirement investment and an optimum one.

Here's how much Suze Orman said you need to invest for retirement

According to Orman, the ideal amount you should be investing in your 401(k) is 15% of your income. This includes both the contributions you make to this retirement investment account as well as any employer-matching contributions that some companies offer.

While 15% is a good goal to set, Orman acknowledges that not everyone will be able to accomplish it. If you aren't yet at this ideal threshold, Orman also has a recommendation on the bare minimum you should be contributing to a 401(k) to set yourself up for a secure future.

"At a minimum, you want to save 10% of your salary in your 401(k)," Orman said. "That’s the minimum."

While contributing 10% to your 401(k) may not necessarily be enough to provide sufficient savings to replace the recommended percentage of your pre-retirement income after leaving the workforce, the contributions will go a long way toward helping you grow your account large enough so you don't have to constantly worry about money.

What can you do if you aren't contributing the minimum amount?

If you're falling short of saving at least 10% -- and ideally 15% -- of your income for retirement, Orman has a simple suggestion that could help you turn things around.

"If you’re not yet at 10% or 15%, boost your contribution rate by at least 1 percentage point right now," Orman said. "Don’t tell me you can’t afford it. You can’t afford not to do this. And I am confident a 1 percentage point increase is something you can adapt to."

As Orman explained, a few years of inching up your contributions will enable you to eventually hit your target 10% to 15% contribution without requiring you to make major (and perhaps unsustainable) lifestyle changes all at once.

Following this tip from Orman is a good way to get started, but there are also other techniques to boost your retirement contributions. If you get a raise, for example, consider contributing at least half the amount to your 401(k). If you do this before you get used to the extra money, you aren't going to miss it.

Whatever approach you choose, try to get up to a 10% minimum contribution rate ASAP and, if you can, consider going up from there until at least 15% of your earnings are devoted to helping you have a secure life as a senior.

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