Picture yourself in retirement. In order to make those dreams come true in the future, you must be realistic about your finances today. The amount of money you’ll need for retirement will depend on many factors, such as the following.
How many years will you have in retirement?
What kind of lifestyle do you want to live?
Will you be single or living with a partner?
Will you own your home debt-free, or will you rent?
Will you still be paying off college expenses for kids?
Will you be contending with new medical expenses or health issues?
Although some of these factors are impossible to predict, an easy rule of thumb is that you will need at least 70 percent of your pre-retirement income to continue your pre-retirement lifestyle in retirement, and more if you’re planning to kick it up a notch in retirement. Use an online planning tool, or work with a professional financial planner, to calculate exactly what you will need to save today in order to live the kind of lifestyle you choose in retirement.