If you are saving for retirement, you're already ahead of many Americans who either haven't started or haven't put much money into their retirement plans. It is impossible to say exactly how much money you need to put away for retirement since each person's situation is different. With the help of a financial adviser, you can determine how much to put away.
Before determining how much money to set aside for retirement, you need to figure out what you plan to do in your retirement years. You may want to travel the world, spend your days at the golf course, hone your gardening skills, or spend time with your grandkids. Whatever the reason, you need to decide how much money you need to support these activities, and use that to set your goal.
For basic needs, it is recommended that you have enough savings to supply 70 percent of the income you received in your working years. For example, if you earned $100,000 at your job, you should save enough money to supply yourself with $70,000 per year. You should expect to have fewer expenses while retired than when you were employed, such as work-related travel expenses, a mortgage and saving for retirement.
How much to put away for retirement also depends on how long you expect to live. As of 2011, the life expectancy of an average American is just over 78 years, according to the CIA World Factbook. If you plan to retire at 65, you need to ensure you have enough savings to last you at least 13 years. However keep in mind that the average life expectancy rises over time, so you may be expected to live longer, meaning you have to save for a longer period of time.
Working with your financial planner, you must come up with a budget so you can put money away for your golden years. Say you require $50,000 per year in retirement and you expect to live for 15 years after retirement. You need to save a minimum of $750,000. Determine how much to put away each year and invest it so it can grow to reach your goal.
- Photo Credit Jupiterimages/liquidlibrary/Getty Images
How Much Can You Put Away Each Year for Retirement?
With the company pension quickly becoming an endangered species, it has never been more important for workers to build their retirement nest...
How to Put Some Money Away for Savings
Put that money into your savings account, where it will grow each time you shop. ... How Much Money Does a Person...
How Much Should You Save for Retirement at Age 45?
How Much Should You Save for Retirement at Age 45? X. Must See: Slide Shows. ... How Much Money Should You Put...
How Much Should I Save Each Month for Retirement?
How Much Money Should You Put Away per Month for Retirement at Age 35? ... figure out how much money is required...
How Much Retirement Should I Have by Age 40?
There are no hard and fast rules for how much you should have saved for retirement by age 30. ... How Much...
How Much of a Paycheck Should Go Toward Retirement?
Any amount you set aside from your paycheck for retirement offers ... The easy answer for how much a person should save...