Calculating how much to save for retirement
"It’s important to me to know that I can support myself when I retire. It’s tempting to spend to keep up with what my friends are doing. But I’m committed to finding ways to save each month. I know I’ll be happy down the road if I feel secure about my finances."
The amount of money that you’ll need when you retire depends on your lifestyle. In general, experts recommend planning to save enough money to replace 60 to 80 percent of your working income in retirement. This figure comes from the Employee Benefit Research Institute.
The amount of money that you'll need is also affected by inflation. Inflation is the process through which the cost of living rises over time. It's a good idea to factor in inflation when you estimate your retirement income needs.
To determine how much money you'll need when you retire, use the FINRA retirement calculator. Another useful tool is the Social Security Administration's benefit calculator. This calculator can help you determine how much social security income you can expect. Want to be a millionaire before you retire? Use the online calculator "Becoming A Millionaire" to determine how much you need to set aside each year to become a millionaire.