Social Security alone is unlikely to provide sufficient income for your retirement, unless you plan a fairly meager existence. To retire comfortably, one rule of thumb suggests that you will want 70-80% of your pre-retirement income to maintain your current lifestyle.
How can I calculate the amount of savings I’ll need?
First: Write down your family’s current yearly income and multiply it by 80%.
Second: Determine your monthly Social Security benefit and multiply it by 12 (to convert it to a yearly amount), and then subtract that from the first step. Don’t forget to add your spouse’s benefit if you are married. You can find your estimated Social Security benefit at https://www.ssa.gov/retire/estimator.html.
Third: Take the amount you determined above and divide it by .04.* This will reveal the suggested amount you need at retirement.
Fourth: Compare this savings amount to your current savings. Are you on track to meet your suggested amount or do you need to make contribution adjustments?
Don’t take this calculation too lightly and don’t wait too long to pay attention. If you’re under-prepared with little time left, your options may not look bright. It’s better to over-prepare than to get caught short.
Want to request information on up-to-date strategies for saving? Just ask for our information on possible options to create wealth before retirement.
*This amount represents 4% yearly return over the life of the savings.
CATEGORY: Retirement Planning | September 28th, 2017 | BY: Neal Pettinelli