How much money do I need to retire? — Planning your retirement

You have been working hard for many years. You have been investing in your retirement fund. You might now feel ready to stop working and enjoy retirement, but you might be wondering if it is the right time and if you have enough money. 

The general guideline most experts agree on is that you should be able to live off of 4% of your retirement savings per year. You can figure this out by taking whatever your retirement savings goal is and divide it by .04. For example, if you want to live off of $80,000 per year, you would need at least $2 million in your retirement nest egg. Of course, other factors like interest rates, inflation and Social Security all play a role in how much you can live off of each year; but generally, you are in good shape if you can follow the 4% guideline.

How much money do I need to retire?

Besides the 4% guideline, there are some other methods you can use to help determine how much you need to save for retirement:

• Live off of 80% — Given your current lifestyle, you should be able to live off of 80% of what you currently make as a full-time employee. For example, if you earn $100,000 per year now, then a goal of $80,000 will likely get you to a place that will allow you to maintain your standard of living. How is that possible? You will no longer be contributing to Social Security, saving for retirement in your 401k or IRA, having to spend money on clothes for work or commuting to the office, etc. If you don’t project you’ll have at least this amount of income, then you might not be ready to retire yet or you will need to reevaluate your goals and strategy.
  
• Use a retirement calculator — Retirement calculators, like this one from nerdwallet, can take in factors like your age, pre-tax income and current savings to help you determine how much you need to retire by your desired retirement age. They are not as comprehensive as a personal financial plan but they can help you get a good idea on how much you need so you can get started or improve your current savings strategy.

Saving for retirement with the assistance of a ProVise financial advisor

You probably just want to know how much to save and when to save it by so you can enjoy your retirement. However, without a strategy, you might fail to reach your desired goal by the time you are ready to retire. This is where our CERTIFIED FINANCIAL PLANNER™ professionals can help.

ProVise Management Group financial advisors can review your current circumstances and your retirement goals to help you develop a strategy to meet them. In other words, we can help navigate the hard stuff like how much to save and when to contribute more or less to your retirement fund, so you can focus more on enjoying your life now instead of worrying about the future.

We provide plans at a fiduciary standard of care. We also offer an unconditional money-back guarantee if you are unhappy with your written plan. Simply return it to us and we will refund 100% of the fee paid.

Do you need help deciding how much to save for retirement? Our team is here for you. Contact ProVise today to schedule a complimentary consultation.