How to Build a Comfortable Retirement Starting With Just $300 a Month
Here's How To Calculate Much You Need To Save For Retirement
“While there’s no one-size-fits-all number, a common rule of thumb is that you’ll need about 80% of your current annual income to maintain your lifestyle in retirement,” said Priya Malani, founder and CEO of Stash Wealth.
She advises clients to multiply 80% of their current salary by how many years they expect to live in retirement. This formula can be used whether you expect to retire early or not.
For example, if you currently make $65,000 a year and expect a similar standard of living in retirement. This would be your retirement savings target, assuming you retire at age 65:
($65,000 × 0.80) × 30 = $1.56 million
This formula doesn’t give you the whole picture of what you’ll need to save for retirement though. You may end up with multiple income sources, a spouse’s or partner’s retirement savings, family inheritance, or much lower expenses if you choose to downsize.
