how much money is needed for a good and comfortable retirement

Everyone who starts earning thinks about saving for retirement, but he/she doesn’t know how much money is needed for a good and comfortable retirement. For retirement savings, you have to consider the following points.

a. How much money do you require for retirement

b. what is your current age

c. At what age you would retire

When you deeply understand these points, you will be able to calculate your retirement savings. Money and age for retirement are different for everyone. Some people want to retire at the age of 50 to 60, but many want to retire at the age of 70. You are also required to know the age of living after retirement. The quality of health is also necessary to consider in the calculation of retirement savings.

Most of the experts suggested that every individual requires 70 to 80% of their current income for retirement. For example, if an individual earns an amount of $100,000/- per year, then he requires $70,000 to $80,000 per year after retirement.

But many other points are also necessary to know for the calculation of retirement savings, the top of them is inflation, you can buy your all required items at $100,000/- but is it possible after 20 to 30 years that you could buy the same item at the same price? It is not possible due to the increase in inflation.

Whenever you calculate your retirement savings, you need to input interest or growth rates along with inflation rates to find the best result.

The next point that should be considered in the calculation of retirement is family. Whether your children will be dependent on you at your retirement age or they will start earning and will also support you to fulfill your expenses.

If they will be fully independent in financial matters and also your supporters, you require less money than 70%. Because nowadays, the major expense for everyone is the education of the children. If your children are at school age when you retire, your expenses will not decrease.

Let’s discuss how much money you should save for retirement at different ages.

If you want to start at an early age you require less money and if you want to start later stage you require more money for retirement savings. The detail of age-wise saving is as under:-

Age 30—one times annual salary
Age 35—two times annual salary
Age 40—three times annual salary
Age 45—four times annual salary
Age 50—five times annual salary
Age 55—six times annual salary
Age 60—seven times annual salary
Age 65—eight times annual salary

The third point you should consider in the calculation of how much money is needed for a good and comfortable retirement is where you intend to save your money. It also varies from region to region or country to country. In many countries interest rate is very high, but in many developed countries, the interest rate is low to grow money.

In many countries, the stock exchanges pay more but in some countries, stock exchanges have bad situations. In many countries, real estate is the best option for investment due to the high growth rate of population and immigration but in most countries, real estate is not for growing money.

You have to research where you want to save before calculating how much money is needed for a good and comfortable retirement. Some people can make retirement-required money in a year or few years by investing in a stock exchange, forex, or real estate but many can’t make in decades the same required money.

Frequently Asked Questions

How Much Does a Couple Need to Retire?

If both members of a couple are independent, they both need 70% to 80% of their current income excluding the inflation rate to retire. But if one of them is dependent and the other is independent then one of the 70% to 80% is needed. But it may vary for everyone.

What Is the 4% Rule?

The 4% is a rule to withdraw money after retirement from a retirement account. If you require $80,000 annually after retirement you should have in the account about $ 2 million with the minimum growth or interest of 5%.

How Much Should I Save for Retirement Each Year?

The saving for retirement might be different for everyone but it depends on the age, when you want to start saving and what is your retirement age. The most suitable formula for a salary person is as under: