Search

Calculate Your Retirement Savings

401 (k) statement

You dream about your retirement, yet less than half of all Americans have calculated how much they’ll need to save to get there. Everyone's retirement will be different, depending on lifestyle, preferences, and health. So, plan accordingly.

Ask yourself the following questions:

How much have you saved today? Your current savings and its growth rate, plus how much you plan to contribute in the years leading up to retirement, will determine how much you’ll need to earn once you retire.

How much will you need to live? This amount is generally 80 percent of your pre-retirement salary, but it depends on what you’d like to do when you retire. Will you travel or move? Use this calculator to estimate your retirement income needs.

How many years will you work? Depending on how much you’re able to save, you can decide whether you will take full, phased, or early retirement.

How long are you likely to live? Calculate your life expectancy based on your health, family history, and other risk factors using this calculator.

How will you pay for health care in retirement? A major factor in choosing retirement age is the availability and cost of health care. Visit www.myretirementpaycheck.org for information on health options such as long-term care and Medicaid.

What additional sources of income will you receive in retirement? Will you have a pension? How much will that contribute to what you need to live? Learn more about how your other retirement plans payout will affect your plans.

When will you start collecting Social Security? Study your annual Social Security statement from the government, then visit www.myretirementpaycheck.org to judge when to start collecting and estimate what you’ll need in addition to social security.

How to Prepare

Start saving as soon as possible. The longer you wait to save for retirement, the more of your monthly income you’ll have to put aside.

  • As a general guide try to save about 10 percent of your income annually during your early years (20s to 40s) and double that amount during your later years (50s and 60s).
  • Analyze your savings methods. The higher the growth rate, the less you need to save annually due to compounding interest.
  • Enroll in your company’s retirement plan. Allocate to the plan the maximum contribution you can afford, especially if your employer matches your contributions. Take windfalls, such as raises, bonuses, and tax refunds, and invest the funds in your retirement savings account.
  • Consider opening an additional tax-deferred Individual Retirement Account (IRA) or Roth IRA.

Get Help

For help with your retirement investments meet with a fee-only investment advisor, who is paid only for his or her time. He or she can help you determine your long-term and short-term retirement goals and the best way to allocate, diversify, and safeguard your retirement investments. Find more information here.

Tags: