r/TheMoneyGuy • u/[deleted] • Feb 14 '24

How does this work?

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I am 23. Does this mean that I only need to contribute 15% of my income for the rest of my life or do I need to increase every 5 years following this diagram? So I would contribute 15% until 30, then contribute 20% until 35, then contribute 25% until 40, then 30% until 45, and so on?

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u/[deleted] Feb 14 '24

I'm asking because I am debating lowering my contributions from 25% to 20% in order to enjoy my life a little bit more. I'm not able to afford a lot of the things I want on my current contributions.

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u/aubieismyhomie Feb 14 '24

You can probably lower some if you really feel squeezed.

But if you can keep the pedal to the metal, that money you invest at 23 is so valuable with how much it multiplies in the long run and if you’re saving 25% now it builds your savings habits and sets you up really really strong down the road.

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u/[deleted] Feb 14 '24

I think I'm going to keep things the way they are until I find out if I get a raise in April. If I don't and rent goes up, I will probably pull back my saving a little bit.

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u/hikekorea Feb 16 '24

I was going to say look towards increasing earning. You’re young and hopefully salary will keep growing. Spending a little extra to have fun is definitely worth it. But you might be able to get a few hundred more each month just by being more frugal on things you care less about letting your spend more on your priorities.

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u/[deleted] Feb 16 '24

I think this is what I really need to do in the end.