How Much Do I Need to Save for Retirement?

As the retirement years draw to a close, many people wonder, “How much do I need to save for retirement?” They are concerned whether they’ve done enough to help provide for their retirement years, and if there’s more that they can still do before it is too late.

When determining the amount of money you’ll need for retirement, you need to calculate exactly what you’ll need to live on, what bills you will still have to pay each month, how will you pay for health related services, and are you willing to give up some things now so that you’ll have more money for the future. It has been estimated that you will need to maintain approximately 70% to 85% of your current income to live after retirement.


Make a list of everything that you currently owe (mortgage, car payments, insurances, groceries, clothing, utilities, etc.). Don’t forget to factor in at least 4% inflation per year when figuring out what your yearly monetary needs. After deciding on how much money you think you’ll need, you will want to consider when you plan on actually taking retirement. The earlier you plan to retire, the more money you’ll need in your retirement account.

For example, you have estimated that you’ll need $80,000 per year to live on in retirement and will retire at 65. Estimating a 4% withdrawal per year, you would need a minimum of $1,875,000 total retirement account balance. You may decide after you retire that you can do without some luxuries in order to make that money stretch a little further.

If you’re a woman, your financial needs for retirement may be entirely different than if you’re a man.  If you’re married, you need to consider that your husband may not be around when you retire; therefore you will want to factor in that possibility when determining your retirement goals.

Putting money into a savings account, while it is better than nothing, won’t generate the amount of money you will need to survive. Social Security may or may not be available when you reach retirement age, so you’ll want to consider what you can do now. Luckily, there are still options for saving and investing that may help your retirement outlook a little brighter.

Stop wondering, “How much money do I need to save for retirement?”  Make an appointment with a Financial Counselor or Certified Public Accountant. They will be able to help you make the determination of how much you’ll need, and be able to give you advice on how to get to that financial goal. They may even have some other ideas of things that you can do now to not only save money in the short-term, but also save money “for” the long-term.