You already know how important it is to start saving early for retirement. But do you know how much you need to save to ensure you’ll be able to live comfortably throughout your golden years?
Unfortunately, there is no easy answer for how much you need to save for retirement—that amount is highly individual and depends on your expenses and your lifestyle. But there are a few ways to estimate how much you’ll need as you work toward setting yourself up for a financially healthy retirement.
1. Plug your information into a retirement savings calculator.
Online calculators—including WaterStone Bank’s retirement savings calculator—can help you project how far your savings will take you in retirement. These calculators take into consideration how much you already have saved, when you expect to retire, and other personal financial information, like your anticipated expenses during retirement.
2. Consider how long you’ll live.
It may seem morbid, but it’s important to look at the data about the average lifespan for men and women when you’re considering how much money you’ll need in retirement.
It’s a good idea to budget for a long retirement—if you only save enough money to live comfortably to age 75, you could end up outliving your savings.
3. Look beyond retirement accounts.
There are plenty of rules of thumb that offer simple guidelines on how much to save for retirement. Some say to save 10 times your income by age 67; others suggest you can get by with eight times your annual salary.
But ultimately, predicting how much you need for retirement requires a more nuanced evaluation of your overall financial picture.
Look beyond IRAs and 401(k) plans to evaluate your other savings and investment accounts, Health Savings Accounts, and debts: Will you continue paying a mortgage into retirement? What Social Security and healthcare benefits will you be eligible for upon retirement, and when will those benefits become available? All of these factors influence how much you’ll need to save up.
If you’re feeling overwhelmed as you look ahead to retirement, a financial professional can help make sure you’re on the right track. Stop into your local WaterStone Bank branch or contact us today to learn more about strategies for retirement savings.
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