Retirement can creep up on you, and many Americans are woefully unprepared.
In fact, nearly 1 in 3 U.S. adults have no retirement savings – zero, zilch, nada. If you don’t want to be eating ramen noodles in your golden years, you need to plan and save now.
If you’re tucking away money for retirement, but you aren’t sure if you’re saving enough to retire at age 65, here’s some guidance. CNN Money collaborated with Charlie Farrell, CEO at Northstar Investment Advisors, to calculate how much money you need to have socked away in your retirement account now.
According to their calculations, this is how much money you need to have saved right now to enjoy your golden years at 65:
- Age 25: $40,000 income ($4,000 in retirement savings); $65,000 income ($6,500 savings); $90,000 income ($9,000 savings); $115,000 income ($11,000 savings).
- Age 35. $40,000 income ($60,000 in retirement savings); $65,000 income ($97,500 savings); $90,000 income ($135,000 savings); $115,000 income ($172,500 savings).
- Age 45. $40,000 income ($148,000 in retirement savings); $65,000 income ($240,500 savings); $90,000 income ($333,000 savings); $115,000 income ($425,500 savings).
- Age 55. $40,000 income ($248,000 in retirement savings); $65,000 income ($461,500 savings); $90,000 income ($639,000 savings); $115,000 income ($816,500 savings).
- Age 65. $40,000 income ($480,000 in retirement savings); $65,000 income ($780,000 savings); $90,000 income ($1.1 million savings); $115,000 income ($1.4 million savings).
Farrell’s calculations are based on a 30-year retirement period at an income about 70 to 80 percent of that individual’s preretirement income. They also assume that Social Security will cover about 20 percent of retirement income, a 3.5 percent return on investments, and a withdrawal rate between 4 and 5 percent annually in retirement.
So, how does your nest egg look in comparison to Farrell’s suggested savings? If your savings aren’t where they should be, check out our tips on how to catch up in “Behind on Retirement Savings? Here Is What To Do.”
MTN has lots of helpful retirement planning tips. Try “How to Get a Grip on Your Retirement Savings and Security” or “6 Ways to Ensure You’ll Have Enough Money in Retirement.”
Are you comfortable with how much money you’re tucking away for retirement? Share your comments below or on our Facebook page.
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