The amount of money that you’ll need when you retire depends on your lifestyle. In general, according to experts at the Employee Benefit Research Institute
, you should plan to save enough money to replace 60 percent to 80 percent of your working income in retirement.
As you think through how much money you will need, be sure to take inflation
into consideration. Inflation is the process through which the cost of living rises over time. Inflation means that today’s dollar will have less buying power in the future. That’s why it’s important to factor in inflation when you estimate the retirement income you’ll rely on decades in the future.
Following are a few tools to help you calculate your retirement income needs:
- Determine the amount of money you will need to save for retirement by using the FINRA retirement calculator.
- Calculate how much Social Security income you can expect to receive with the Social Security Administration's benefit calculator.
- If you have high savings aspirations, use the online calculator Becoming a Millionaire to determine how much you need to set aside each year to become a millionaire by your target date.