How Much Do You Need for Retirement?

Retirement may seem like it’s pretty off for those who are part of the X and Millennial generations. However, as has always been the case, retirement has a way of creeping up on people.

With retirement not quite as far off as it seems, it’s important for the members of these two  

generational groups to have a solid estimate of how much they need for retirement. After all, they need to be saving for it now.

In a perfect world, everybody would be able to save about a million dollars before retirement. However, in today’s far-from-perfect world, that number, or even half of it, can be downright impossible to save in a lifetime. Thanks in large part to a poor housing market, student loan debt, credit card debt, and just lots of debt in general, saving for retirement has never been harder.

Plus, as nice as it would be for everyone to have a million dollars, not everyone really needs that much. The actual amount of money needed to retire comfortably will vary greatly from one person to the next. Generally speaking, though, most people need at least 10 to 15% of what they made before retirement coming in yearly in order to live comfortably.

With that said, calculating a retirement estimate isn’t all that difficult, as long as one realizes it’s not going to be an exact figure. People first need to think about how much they spend each year and then compare that to how much they’re likely to spend once they retire. Obviously, this projection will depend quite a bit on what the person plans to do during retirement.

Those who plan on moving somewhere more affordable will obviously have a lower projected expenditure during retirement, as will those who will have Social Security income. Conversely, those who plan to travel and explore in their post-working years will likely have more expenses.

Once you have a pretty good estimate of how much you’ll need to live comfortably during retirement, the next step is to figure out a workable per-year savings to get you to that estimated figure.

If you can’t save enough, then you’re either going to have to earn more money or rethink your retirement lifestyle.

Fortunately, you don’t have to go through all of this difficult planning and figuring on your own. With the help of a skilled financial advisor, you can come up with a savings plan that will get you to where you want to be in terms of retirement income, or at least somewhere in the ballpark.

Related articles

• Determining a Realistic Retirement Figure for Gen X and Millennials (thestreet.com)