How much retirement savings should you have at this time?

Personal Retirement Planning

Personal retirement plans are individual, but general indicators can be used to assess whether you are on the right track for retirement. These indicators can help you determine if you are on the right path to retirement.

Bank Assistance in Determining Your Saving Capacity and Setting Savings Ratios as Follows:

Depending on your age and income, you can set savings goals based on a multiple of your income. You can then track your progress through the accumulation phase of your career.

Savings Based on Pre-Retirement Income Ratio:

Conventional wisdom suggests that you should aim to replace about 80% of your current income in retirement to maintain the same lifestyle during retirement.

Savings Based on Withdrawal Rate:

Another general rule in retirement planning is the 4% withdrawal rule. This rule states that you can withdraw 4% of your retirement balance annually, increasing this amount with inflation each year to last for 30 years.

Staying on Track with Indicators

Once you have established a retirement savings amount based on one of these guidelines, aim to save enough to meet that goal.

Using Retirement Savings Indicators with Caution

General indicators, such as Fidelity’s savings benchmarks and expected income replacement ratios or withdrawal rates, provide an acceptable starting point to determine if you are on the right track for retirement savings. For many people, the amount saved based on these indicators serves as a good guideline for retirement planning.

Conduct a Detailed Estimate

The best way to find out if you are saving enough is to run a detailed estimate using a retirement calculator. From there, you can create a budget plan based on your real post-retirement expense needs. This will allow you to review your entire financial picture, including personal Social Security estimates and the potential use of secondary home equity, as well as other income sources such as inheritance, part-time work, or rental income.

Frequently Asked Questions:

-How long will my retirement savings last?
-How can I fill the gap in my retirement savings?

Source: https://www.thebalancemoney.com/retirement-savings-benchmarks-4150169