If you are about to retire, you may be worried about how much you need to save to be able to live comfortably once you do. There is no right answer to this question. All you can do is plan carefully to live comfortably on your monthly income. Most retirees, plan on living on social security and any income they get from savings. This is a good way of living.
According to most sources, you’ll need approximately 70% of your pre-retirement yearly salary to live comfortably after retirement. This, of course, depends on whether you have paid off your mortgage and your health is good. However, if you are planning on purchasing a new home, going on international trips, and furthering your education, you may need much more than this.
The best thing to do is to be realistic about your expenses and plan accordingly so that it is possible to retire comfortably on the money you have. There are various retirement calculators that enable you to decide if you need to save more to improve your retired life. All you need to do is submit your age, current annual income, spouse’s annual income, current retirement savings, expected inflation, desired retirement age, number of years of retirement income, income replacement at retirement, pre-retirement investment return, post-retirement investment return, marital status, social Security override amount and the retirement calculator will help you analyze your financial needs.
Planning a budget requires time and effort and realistic planning. You can save more if you downsize and move to a smaller home. There are many such homes in active adult communities. Eating at home is also a way of cutting expenses. But, what good is retirement if you cannot go out and fun, right? If you budget properly, you will be able to save a significant amount to eat out at least once or twice a month.
Remember to save money, even after retirement, for emergencies. You’ll never know when things will change. Unexpected emergencies are part and parcel of life. This will also keep you from tapping into your savings in emergencies.
How much you need to save for retirement depends on you and how you plan for it. So, if you haven’t already, do so now.