How Much Do I Need to Save For Retirement at 55, 60, 65? (Retirement Calculator)

Are you asking questions like “How much do I need to retire?”

Retirement planning and understanding how much money do you need for your retirement savings if you want to retire is just as important as setting a household budget or learning how to invest

The best way to know how much do you need for retirement is to get a rough estimate with an retirement calculator.

Retirement Calculator To Calculate Retirement Savings

By adding your current age, your retirement age, the amount you spend per year, current inflation rate and how long you think you will live, this calculator can tell help you find your retirement readiness.

How much money you need to save? Did the numbers surprise you? Do you really need million in retirement assets?

How Much Do You Need to Retire?

According to the Bureau of Labor Statistics, retiree age 65 or older spends an average of $4,065.95 per month, or approx. $48,791.40 per year.

Depending on your current age, with an inflation rate of approx. 3%, the amount you’ll need to save will increases as you reaches your retirement age in the next 10 to 40 years time.

How Much Do You Need to Save to Retire at 55, 60, or 65 Years Old?

Most people retire when they reach the age of 55 to 65, which is probably the sweet spot where your kids are grown up enough to survive on their own, and you are still “young enough” to enjoy the beauty of retirement life.

How much you require to save depends on what you want to do during your retirement and how many years are you from your retirement age.

With a life expectancy of approx. 80 years old, retiring at 55, 60, or 65 years old will mean you will need to save enough for you to spend the next 25, 20, or 15 years of your life respectively without an income.

Below is a simple table on how much you will be expected to save for a comfortable retirement.

Current AgeSavings to Retire at Age 55Savings to Retire at Age 60Savings to Retire at Age 65
20$ 3,432,349$3,183,227$2,767,674
21$ 3,332,378$3,090,512$2,687,062
22$ 3,235,319$3,000,497$2,608,799
23$ 3,141,086$2,913,104$2,532,814
24$ 3,049,598$2,828,256$2,459,043
25$ 2,960,775$2,745,880$2,387,420
26$ 2,874,539$2,665,902$2,317,884
27$ 2,790,814$2,588,255$2,250,373
28$ 2,709,528$2,512,869$2,184,828
29$ 2,630,610$2,439,678$2,121,192
30$ 2,553,990$2,368,620$2,059,410
31$ 2,479,602$2,299,631$1,999,427
32$ 2,407,381$2,232,651$1,941,191
33$ 2,337,263$2,167,623$1,884,652
34$ 2,269,187$2,104,488$1,829,759
35$ 2,203,094$2,043,192$1,776,465
36$ 2,138,927$1,983,682$1,724,723
37$ 2,076,628$1,925,905$1,674,489
38$ 2,016,144$1,869,810$1,625,717
39$ 1,957,421$1,815,350$1,578,366
40$ 1,900,409$1,762,476$1,532,394
41$ 1,845,057$1,711,141$1,487,761
42$ 1,791,317$1,661,302$1,444,428
43$ 1,739,143$1,612,915$1,402,358
44$ 1,688,488$1,565,937$1,361,512
45$ 1,639,309$1,520,327$1,321,857
Approx. the amount you’ll need to save to retire at 55, 60, or 65 years old with a 3% inflation rate.


Yes, I was too! When I calculate I need at least $2 Million just to retire with my current spending! Yes, it is a number with 6 zeros!

“But why the huge numbers?”

It is because of inflation. The scary word that reduces your buying power as time passes.


  • A plate of chicken rice that cost $2.00 Ten years ago now costs $3.50.
  • The plate of chicken rice has an annual inflation rate of approx. 6%

That 6% is much more than your annual pay raise that is designed to catch up to the inflation rate.

How to Calculate How Much You Need to Retire Comfortably

Your retirement goals will serve as the foundation for your entire savings plan. This determine how much retirement nest egg do you need in retirement.

1. Desired Retirement Age

Your retirement age determine how much pre-retirement income can you make to achieve your retirement savings goals. If your pre-retirement annual income is high and your expenses is low, you may have the option to choose a lower desired retirement age.

  • Do you aspire for early retirement, perhaps at age of 50 or 55.
  • Do you want to retire at 60 or 62?
  • Do you want to work longer and have a delay retirement at the age of 65 or 67?

The earlier you retire, the more you’ll need to save to sustain your lifestyle. The number of years in retirement will influence the amount you need to save for retirement each year.

2. Expected Retirement Lifestyle

Think about the kind of lifestyle you want in retirement, this is key to figuring out how much additional retirement income you’ll need to support your desired retirement lifestyle

  • Do you envision traveling the world?
  • Will you be indulging in your hobbies that requires huge expenses?
  • Are you downsizing to a simpler life ?

Your desired lifestyle will directly impact your retirement budget.

3. Inflation and Cost of Living

Inflation erodes the purchasing power of your money over time. This is one of the few factors that cannot be controlled by you, and can impact your retirement plan as an unavoidable external factor.

Consider how inflation will affect your expenses during retirement. What costs $50,000 today could cost substantially more in 20 years.

  • Average inflation rate is at 3% and inflation can range from 2% to 7% depending on where you live and stay.
  • Earlier you start your retirement, more impact inflation will have on calculating how much money you’ll need for your retirement.

How to Estimate Your Retirement Expenses?

To calculate how much you need to retire, it’s essential to break down your anticipated expenses that you may have during your retirement.

  • Basic Living Expenses: Your basic expenses include housing, food, utilities, and healthcare. These costs are non-negotiable and form the core of your retirement budget.
  • Leisure and Travel Expenses: Factor in the activities you wish to pursue during retirement, whether it’s traveling, golfing, or taking up a new hobby. These discretionary expenses contribute to your retirement happiness.
  • Unexpected Costs: Prepare for unexpected expenses, such as medical emergencies or home repairs. Having an emergency fund in retirement can prevent financial stress.

Estimating Annual Retirement Expenses

To get the numbers when estimating your annual retirement expenses, you can use this following formula:

  • Annual Expenses = Basic Living Expenses + Leisure and Travel Expenses + Unexpected Costs

Estimated Annual Expenses for Different Retirement Lifestyles

Generally, we can categories the different retirement lifestyles into 3 different categories:

  • Simple and Frugal: Basic Living Expenses + Low Leisure and Travel Expenses + Unexpected Costs
  • Comfortable and Active: Basic Living Expenses + Average Leisure and Travel Expenses + Unexpected Costs
  • Luxurious and Adventurous: Basic Living Expenses + High Leisure and Travel Expenses + Unexpected Costs

A quick illustration will have the following table.

LifestyleAnnual Expenses
Simple and Frugal$30,000
Comfortable and Active$50,000
Luxurious and Adventurous$75,000
Retiree Annual Spending

These estimates provide a starting point for your retirement planning.

Finding Your Sources of Retirement Income

Even when you retire, it doesn’t always means you do not have a source of income during retirement. Some retirees look for creative ways to ensure that they have an income even after they retire.

Here are some sources of income you can have even during your retirement:

1. Social Security Benefits

Social Security is a fundamental source of retirement income for most Americans. The amount you receive for the retirement benefits depends on factors like:

  • Your work history
  • Age at which you claim benefits

2. Pensions and Annuities

If you have a pension or annuity, it can provide a steady stream of income throughout retirement.

It is a pretty good option to get a reliable income even when you are retired from your job. However, the income you get from the pension and annuities are known to be quite a small sum, thus you will want to determine the expected payouts from these sources in your retirement planning.

3. Passive Income

Create a passive income machine where it helps you bring you an income even when you don’t exactly “work for it”. Income source such as:

  • Dividend income
  • Rental income
  • Royalty income
  • Interest income
  • Passive business income

All these income can help pay for your retirement, and my favorite is of course dividend income as it is as passive as you can get.

Calculating Your Retirement Income Gap

To gauge how much you need to save for retirement, focus on bridging the “retirement income gap.”

Retirement Income Gap

The retirement income gap is the difference between your estimated annual expenses and your projected retirement income from sources like Social Security, pensions, and personal savings.

It tells us how much more savings you’ll need to save to reach the required retirement saving.

Retirement Income Gap Formula

When calculating your retirement income gap, you can use this formula to calculate the savings needed to bridge the gap:

  • Savings Needed = Annual Expenses − Retirement Income

Example: Mary plans to retire at 65. Her estimated annual expenses are $60,000, while her expected retirement income is $40,000. Thus, she needs to save at least $20,000 annually to maintain her desired lifestyle.

Strategies for Reaching Your Retirement Goal

There are many strategies that can help you reach your retirement goals, creating the retirement fund you’ll need for a comfortable retirement. Let’s take a quick look at some of them.

  1. Early Planning and Make Use of Compounding: Start planning for retirement as early as possible. Compound interest can significantly boost your savings over time.
  2. Increasing Contributions: Consider increasing your contributions to retirement accounts like your 401(k) or IRA. Even small increases can make a substantial difference.
  3. Diversifying Investments: Diversify your investment portfolio to manage risk. Consult a financial advisor to create a diversified strategy.

Is the Average Citizen Ready To Retire?

According to a report by CNBC in a study in the United States, 1 in 3 citizens has less than $5,000 saved for retirement. Most citizens have no retirement plans at all. The results are absolutely shocking.

  • 21 percent have nothing saved for the future
  • 11 percent have less than $5,000 in savings
  • 16 percent have less than $200,000 in savings
  • 52 percent have more than $200,000 saved in the bank
Are You Ready for Retirement according to Statistics by incomebuddies.com
Are You Ready for Retirement?

In fact, nowadays, many people who reached their retirement age were not able to retire. And this trend is going to get worst in the next 5 to 10 years.

Just recently, while I was having lunch in my favorite cafe I notice an old uncle probably in his late 60s working in the cafe clearing plates after the customers.

He is just one of the many men and women that have to work way after their retirement age just to get food on their table. But retirement shouldn’t look like this.

Retirement is the period of life where we can finally relax and enjoy the fruits of our labor with our grandkids running around the garden us enjoying the warm sunshine with a cup of orange juice.

We want our retirement to be comfortable and stress free.

Monitoring and Adjusting Your Retirement Plan

Remember that your retirement plan is not set in stone. Life events and economic changes can impact your finances. Regularly assess your plan and make necessary adjustments.

Use our free retirement calculator to get an accurate estimate on how much you’ll need to accumulate to achieve full retirement.

In order for us to retire comfortably, we need to know how much we need in the bank to fund our retirement. This dream retirement lifestyle is totally possible with great retirement planning.

Preparation for our retirement should start early, as early as when you are in just your 20s, or 30s.

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