What is the minimum a person should have saved prior to retirement?
A very broad rule of thumb is to say 20 to 25 times the annual income that you would desire in retirement. Now, if there are other sources of income (social security, pensions, rental income, etc.) this can be adjusted. In most cases, my clients generate retirement income from a variety of sources, so this broad rule of thumb is applied but then heavily modified depending on their circumstances.
The reason for the "20 to 25 times" factor? It is relatively safe to assume a retirement portfolio can generate 4% to 5% of it's value in retirement income with very little (if any) chance of ever running out of money. So a $1,000,000 retirement portfolio could safely generate $50,000 per year of income and $50,000 x 20 = $1,000,000. Simple as that, but in practice, not so simple. Other assets, other sources of income, legacy plans, etc. all factor into the equation. Seek a qualified, fee-based financial planner to get some help with your personal retirement plans. Find the right planner and you will be glad that you did! | 11.04.15 @ 16:11
The minimum that one needs to save for retirement depends on how much income you will you need to provide for you and your loved ones in support of your lifestyle when you first retire. In addition, you will need to maintain this lifestyle throughout what will likely be a long retirement. During this long retirement, your income needs will likely increase in order to maintain your purchasing power in support of your lifestyle.
So as you can see that answer is specific to each individual and depends on the possible sources on your income in retirement such as Social Security and pensions.
Work with a financial adviser to help you answer that question for you specifically. Good luck! | 11.17.15 @ 19:23