How Much Do I Need To Save For Retirement? – Retirement is coming and many need to know how much to save in order to make it work. This is a very common question for those with retirement concerns and there is only one real answer. It depends.
Retirement only has meaning in the mind of the beholder. Simply put, what retirement means to you is not what it means for me nor the next person. We are all different and have a different set of goals and dreams for our twilight years. Therefore, you have to ask yourself, what do you want to do in retirement?
How Much Do I Need To Save For Retirement?
How Much Do I Need To Save For Retirement?
Since there is so much flexibility and possibility in the world of retirement for individuals, it is critical you examine the lifestyle you would like to lead once you are done working. You have to know what you desire to do because based on that it will let you know how much money you need to save in retirement.
As we discussed in our article about retirement before 50, you have to ask yourself some very serious questions about retirement and your expectations. However, I will give you the conventional line of thinking.
This route of thinking says you need to have a least 70% of your yearly income rolling in to be able to enjoy retirement. However, it is critical to think about what you desire during these years to really have an idea of what you want to do.
World Traveler – $4 Million Dollars - Let’s say you want to retire and really jet set around the world. Taking this time to enjoy all things life has to offer that you were just too busy to enjoy. It will take about $4 million dollars to pull this off and you have to keep in mind people are living longer and longer these days, therefore, you have to make your money last, but $4 million dollars would be a great retirement. I am certain of it. This gives you $200,000 per year for 20 years to really see the world.
Enjoyment – $2 Million Dollars – $100,000 a year should be enough in retirement to enjoy your life. There are not many things that you will not be able to do on this sort of money if you have all your bills paid off by then and are able to keep your monthly expenses down.
These numbers are not set in stone and are by no means the only goals in the world. Again, retirement is an individual things, therefore, the number you need to attain to live your retirement goals are dependent on your desires. Search yourself and find out what it is you want out of life and the number will be obvious. - How Much Do I Need To Save For Retirement?
I’m definitely in the enjoyment category. I would love to travel the world, but there’s only a few places I would want to go, and I would want them to be semi-long term trips. 6 months to a year. The husband and I are talking about a trip to Egypt.
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Sounds like the 4 Hour Work Week to me. You can do it!!
Be sure and start now and stick to it. I am 56 and divorced. I have kids to put through college in 5 yrs. Things happened when I was your age and now I’m sweating to save, but the baby boomer generation are going to have to work until 75 or 80. Don’t stop whatever you have to do!
Mary, thanks for sharing. Wow, you are so right, life does happen, so we all better get prepared to make retirement a reality!
Wishing you the best!
They crazy thing is that you don’t even have to save that much. You can work on a smaller lump sum that earns interest and live on the interest payments alone. The more you want to live one, the more you will have to save obviously but 4 mil earning 2% TIPS would leave you with an inflation protected 80k a year (forever, instead of 20 years) and you could keep the principal to pass on to your kids.
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GREAT POINT! AND A GREAT TIP ABOUT PASSING IT ON!!
That is so true and probably the best way to work it. Not only can you have the retirement you desire, but the satisfaction of knowing you are setting the next generation up for success.
Is there any benchmark as such? I am sure I can’t save $4M for sure and I like to travel a lot