1 by 1 by 1
By increasing the amount you save by a mere 1% every year, you could quadruple your nest egg. Here's how:
Bank on this
Let's say you make $60,000 a year, and that you're saving 5% of your income.
Let's also assume you have $14,000 in savings right now.
Your boss gives you a 3% raise per year.
You expect to earn, over a 20-year horizon (maybe you're 45 right now), an average rate of return of 7%.
Use this handy slider tool to run your own numbers.
Check this out
If you continue to save 5% of your income over those 20 years, you'll end up with $130,228.
But, if you were to increase that by just 1%—so now you're saving 6% during that time—you'd end up with $252,900.
Here's the kicker
BUT, by increasing your savings by 1% every year to a maximum of 16% (the limit of this particular tool)—letting it grow for the full 20 years...
You'll retire at 65 with $524,782. That's half a million dollars.
We dare you
Increase your savings by 1% today. Then brag or rant about the state of your savings.