Here's an article from Parade magazine that details what you'll really need to retire. The bad news is that it's a lot more than you think because:
- Your retirement savings must last 20-30 years. That’s how long a healthy 65-year-old is now likely to live.
- The cost of living will more than double during those years, even if inflation averages a modest 3% a year.
To make your retirement savings last, experts recommend that you withdraw only 4% to 5% of your life savings every year. But the key is still how much you have saved. Here are Parade's tips on how to calculate how much you need to save for retirement:
1) List your current annual expenses.
2) Estimate your new expenses in retirement.
3) Add up your estimated future expenses.
4) Find your estimated Social Security benefit.
5) Add your pension, if you’re lucky enough to have one.
Personally, I'm not counting on anything from Social Security. I'm planning to save everything I need to cover all my expenses. That's why I'm maxing out my 401k.
For more information and tips on how to save for retirement, see these links:
- Getting Rich is Simpler than You Think
- Save Now, Retire Rich
- How Much Goes in the 401k?
- How to Retire Rich: Use the Power of Compounding
FMF recommends Emigrant Direct.
Comments