Guide: How much do you need to save for retirement?
By: News 12 StaffOct 19, 2023, 9:30am Updated on: Oct 19, 2023
Saving for retirement can seem like a race against time: How much do you need to save for retirement?
What's the magic number to hit for a golden retirement?
Over the years, finance experts have said that people need to save $1 million — that's recently climbed to $2 million as the cost of living and age demographics have changed. Some advise that you need to save 80% to 90% of your annual pre-retirement income, or that you need to save 12 times your pre-retirement salary. Those numbers and formulas can be a guide, but they're not gospel — everyone's situation will be different.
Here are some things you should factor into your calculations:
1. Housing costs: Include rent or a mortgage, heating, water and maintenance.
2. Health care costs: Fidelity estimates that the average couple will need $295,000 in today's dollars for medical expenses in retirement, excluding long-term care.
3. Day-to-day living: Such as food, clothing and transportation.
4. Entertainment: Including restaurants, movies, plays.
5. Travel: Including flights, hotels, and gas if driving.