Depending on your age, retirement may not be something that you’re thinking about quite just yet. Indeed, not only may you not be ready to actually retire, but you may not even know how much you need to save in order to retire independently. Perhaps you haven’t even started saving.
The earlier you start to save for retirement, the better. What’s more, having a clear idea of how much you’ll need can help you to understand how much you need to save each year, at what age you’ll be ready to retire, and whether or not you’ll be able to maintain your current quality of life. Here’s a look into how much money the average person needs for retirement–
How Much Money You Really Need
The amount of money that you really need in order to retire confidently may surprise you. In fact, while $1 million is the number that’s most commonly cited, many experts estimate that it may actually take significantly more than that. In fact, some retirees could easily use up $1 million in as few as 12 years!
The amount of money that you really need depends on a number of factors, including the age at which you plan to retire, your life expectancy, and your costs of living. One source suggests that the average American should plan to spend about 22 years in retirement.1
Figuring Out How Much You’ll Need
An online retirement calculator published by NerdWallet is a great resource. As an example, the calculator states that a 35-year-old making $50,000 per year with $10,000 in savings will need about $1.44 million in order to retire at age 67. However, even if that person saves 10 percent of their monthly income, they will only have $.64 million at age 67. (Which is why it’s so important to start saving now).
A good rule of thumb to figuring out how much you need is to assume that you will need about 10 times your final salary in savings. By age 30, having the equivalent of your salary saved is recommended; by 50, you want to have six times your salary saved.
How Harvest Financial Planning, LLC Can Help
At Harvest Financial Planning, LLC, we know that saving for retirement can be daunting. We want to make sure that you have the support and resources you need to make saving as straightforward and fruitful as possible.
To learn more about how we can help you to plan for retirement, please contact us today. You can reach us by phone at (219) 864-5050, or send us a message using the contact form on our website.
Information and interactive calculators are made available to you as a self-help tool for your independent use and are not intended to provide investment, tax, or legal advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.
1 – https://www.cnbc.com/2018/04/11/how-to-figure-out-how-much-money-you-need-to-retire.html