How Much Money Do I Really Need to Retire?

There’s plenty of retirement advice out there and of course your level of savings will depend on your individual goals, your current income and anticipated other costs in retirement, such as whether or not you will still be paying for a mortgage. Generally, experts recommend that your retirement income sits at about 80% of your final pre-retirement income. This means that if you make $100,000 a year at the time you retire, you would need to have enough funds set aside to pay $80,000 per year to provide you with a comfortable lifestyle after leaving the workforce. 

Remember that there are many different assets that can be considered as part of this, such as pensions, social security and retirement savings. Furthermore, you may also continue with part-time employment to help you achieve your desired lifestyle.

Another easy to use formula worth remembering is to divide your desired annual retirement income by 4% to follow the 4% rule. This can help you to determine the overall nest egg you need set aside in order to live a lifestyle similar to the one you would be living at the time that you choose to retire.