How much money does a 50 year old need to put away a month to retiree comfortably
Answers | 4
Expected social security or other income during retirement? (Income)
Your monthly expenses? (Expenses)
How much do you have saved already? (Income generating)
Once those questions are answered, you have a starting point.
Ann wants to retire at age 65. She analyzes her expenses and figures that she will need $60,000 a year to live on in retirement. She assumes she will live until 95. 30 years x $60,000 is $1,800,000 (in today's dollars). On the income side, Ann will get $21,600 a year in social security benefits. This will provide $648,000 in income until age 95. (Social Security benefits inflate most every year). So the shortfall (and needed nestegg) for Ann is $1,800,000 - $648,000 or $1,152,000. She would withdraw $60,000 - $21,6000 or $38,400 in the first year of retirement and increase it by inflation each year. Remember, the $1,152,000 savings must stay invested for a return greater than the withdrawal rate!
Please note that this is just an example. Your circumstances will be different. Best to consult a financial planner or use online calculators to calculate your needs.
If you wait to age 70 to start using the same values, you need to save about $1700 per month. Talk to a advisor who can guide you in the right direction and review your plans periodically.