Yes... you have this dream of how you want to retire. But, without that money tree out the back door, there is definitely some planning that needs to be done! But how do you know how much money you will need to retire? My guess it... more than you think. Whether it is extended life spans, reduced employer benefits, lower market returns or increased cost of living... saving more is the only way to secure that dream retirement in the future.
The problem is that most Americans do a very poor job of securing their future with saving. "The Employee Benefits Research Institure reports that if current trends continue, by 2030, the annual shortfall between the amount retired Americans need and the amount they actually have will be at least $45 billion." That is a pretty scary number! Planning today is necessary if you don't want to be looking for supplemental income at age 75!!! Our retirement depends largely not only on our own ability to save and invest wisely, but also on our ability to plan.
How Much You Need in Total? Obviously, the first thing is to determine how much you will need. Most studies agree that an estimate of 80-90% of pre-retirement income would be needed to maintain your current standard of living.
So, a reasonable target is one that will provide you with an annual income similar to the income you have now. The following table offers some quick estimates of how much you might need to accumulate before you can retire.
Annual Retirement Income Need = Total Nest Egg Required (Estimate)
$50,000 = $833,333
$100,000 = $1,666,667
$175,000 = $2,916,667
$250,000 = $4,166,667
There is no time like the present to begin saving! Learn more about how much to save to achieve your goal HERE. The PURTEE TEAM is here to help, too! Feel free to call on us!
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