How much money will you need? It basically depends on a number of factors specific to your personal situation. You might start by addressing these questions: Considering these and other retirement expenses, especially the potential for higher health-care costs, experts suggest that you might need at least 70% to 80% of your pre-retirement income to live comfortably in retirement. Have you considered the impact of inflation on your savings needs? If the average 30-year inflation rate of 2.50% were to continue going forward, an item that cost $1 in 2023 would cost more than $2 in 2053 — twice as much! What retirement lifestyle do you envision? Do you plan to move, travel extensively, or maintain a country club membership? You might need more than someone who anticipates a more frugal lifestyle. How many years will you spend in retirement? Consider your health and family history. At what age would you like to retire? The earlier you retire, the more financial resources you may need. Will you pay for health-care expenses out of pocket, or will a former employer help cover the costs? It’s estimated that some couples who retired at age 65 in 2022 could need as much as $383,000 in savings to cover their health expenses in retirement. Source: Employee Benefit Research Institute, 2023 This hypothetical example is used for illustrative purposes only. Actual results will vary.
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