Ramsey Solutions recommends investing 15% of your income for retirement as Baby Step 4.
Baby Step 4 is to invest 15% of your income for retirement. Investing 15% sets you up to build real wealth. It also frees up the rest of your income for other goals.
Why 15% Works
Most people need 55% to 80% of their pre-retirement income to maintain their lifestyle. If you save 15% of your income from age 25 to 67, you are on track. You can reach that target without financial worry.
For example, if you earn $50,000 a year and start saving 15% at age 30: even with no raises or promotions, you could retire with over $5 million. Consistent investing over time builds significant wealth.
Where to Invest
Invest in good growth stock mutual funds. Diversify your portfolio across four categories:
- Growth
- Growth and income
- Aggressive growth
- International
This mix balances risk and return. It helps you grow wealth steadily over time.
Get Help From a Pro
You do not have to navigate investing on your own. Work with a Ramsey Trusted SmartVestor Pro. They will help you create a plan and explain your options. They will also keep you on track toward your goals.
Retire With Dignity
Building wealth takes consistent effort over many years. Stay consistent and stick to your plan. You will retire with confidence, dignity, and financial freedom.