Nobody wants to spend their golden years working. By the time you reach the age of 65, it’s time to start winding down and enjoying what time you have left on this earth.
How much money should you save for retirement? That depends on a couple of factors. If you want to spend some time traveling around the world, that’s going to cost more than staying at home.
You’ve also got to think about emergencies. You don’t want a single hospital stay to force you to go back to work.
Your lifestyle and emergencies are is only a few things that will factor into your retirement fund. Check out this guide to learn how much you should save to be comfortable.
When Do You Want to Retire?
When planning for retirement, there’s one important question that you have to ask yourself. When do you want to exit the workforce?
The best age to retire is around 62. If you want to jumpstart things ahead of time, you’re going to need to have more money saved up to support yourself. You also have to consider that the longer you stay in the workforce, the more money you’ll be able to put away.
What Are Your Income Needs?
The next thing you have to ask yourself is how you want to live throughout your retirement. Do you want to stay at home and live out your golden years with your family?
Are you planning to retire to a luxury resort in some tropical location? Do you want to hop in an RV and travel around the country for a few years?
Some of those options are going to cost more money than others. Even if you plan to stay at home, you’ll still need to calculate how much money it will take to handle your monthly utilities throughout your retirement.
Crunching all the numbers can be a real headache. That’s why we suggest using an online retirement calculator. It will help you figure out how much you’ll need.
Saving as You Age
There are many common types of retirement plans out there for you to choose from, but all of them have one similarity. You have to start paying into them as soon as you can. Most people start around the age of 20.
At the age of 35, you should have about 2 times your annual salary saved up. By the age of 40, you should have 3 times your annual salary saved up and so on and so forth until you reach your 60s.
By the time you’re ready for retirement, you should have 8 times your annual salary saved up or more. The numbers are daunting, but having this much will allow you to live comfortably.
How Much Money Should You Save for Retirement if You Want to Live Comfortably
How much money should you save for retirement? That all depends on how you want to live. To be happy and comfortable throughout your golden years, it’s recommended that you have about 8 times your annual salary saved up.
It sounds almost impossible to manage, but as long as you pay into your retirement fund each month, you’ll be well on your way toward your goal. For more tips that will help you manage your finances, feel free to explore the rest of our blog.