As a general guideline, what percent of each paycheck should be set aside for retirement?

Setting aside 10% of each paycheck for retirement is often viewed as a fundamental guideline in personal finance discussions. This percentage strikes a balance that many financial advisors recommend for individuals just starting to save for retirement.

The rationale behind this guideline is that it allows individuals to accumulate a considerable nest egg over time without putting too much strain on their current financial situation. This percentage frequently aligns with other savings recommendations, such as taking advantage of employer-sponsored retirement plans or matching contributions.

It’s important to note that while this number is a good starting point, financial situations vary significantly from person to person. Factors such as age, income level, retirement goals, and financial obligations can influence how much one should ideally save for retirement. For individuals who can afford to save more, increasing contributions to 15% or higher is often encouraged, especially in the earlier years of their careers, as it can lead to greater financial security in retirement.