The thought of having enough money for retirement can be daunting, but if you start planning now, you’ll be sure to thank yourself later. It’s never too early to start thinking about retirement, and it may not be as difficult as you think.
Retirement usually requires replacing annual income from work with other sources of income to maintain your current lifestyle. Social Security may cover part of your budget, but there’s good reason to worry about how much you’ll get from Social Security by the time you retire. The rest of the money will likely need to come from savings and investments.
CNBC parsed the numbers to find out how much you’ll need to save now to get $80,000, $90,000, $100,000 each year for retirement, without taking any of your principal.
First, there are some basic rules. This figure assumes that you will retire at his age of 65 and currently have no savings.
Financial advisors typically recommend changing the mix of investments in your portfolio over time, becoming more conservative as you approach retirement. But even after you retire, you will still have stocks and bonds as well as cash. For investments, he conservatively assumes a 6% annual rate of return during tenure, and even more conservatively he assumes a 3% rate of return upon “interest-only” retirement.
It also doesn’t take into account inflation, taxes, Social Security or additional income from 401(k) investment plans.
If your goal is to save $80,000, $90,000, or $100,000 each year for retirement, here’s a complete breakdown of how much you need to save now.
clock video See above for details.
