Retirement is probably the most expensive thing you’ll ever pay for. Because of that, it may be difficult to put the amount you may need to save into perspective.
For simplicity, let’s assume:
You’ll withdraw the same amount at the end of each year.
|If you saved this amount…||…here’s how much you could withdraw annually for 25 years|
These hypothetical examples are for illustrative purposes only and do not portray actual investment results.
Keep in mind that these examples don’t include factors such as inflation and volatility that can have a big impact on your purchasing power and account value. For example, if inflation were 4% a year, a withdrawal of $31,291 25 years from now would only be worth $11,738 in today’s dollars. Investment losses would decrease your account’s growth potential in subsequent years. To account for these factors, you might need to save even more.
Many experts estimate that you’ll need 80% or more of your final annual salary each year in retirement. Social Security may only provide around 40% of what you need. And don’t forget that retirees typically have different types of expenses compared to people still in the workforce, such as increased health care and travel costs. Use our retirement planning calculator to estimate how much you’ll need.