How much money do you need to retire comfortably?

Do you have a retirement plan?

Are you ready to retire now?

These are some questions to ask before you retire.

Retirement planning is probably the most important part of financial planning, similar to setting a household budget or investing. 

We’ve created a simple retirement planning calculator with inflation included.

Let’s find out how much you need to retire comfortably now!

How Much Do You Need to Retire?

Retirement planning is important, but it can be daunting to know just how much you need to save to have a comfortable retirement.

According to the Bureau of Labor Statistics, a household headed by a retiree age 65 or older spends an average of $4,065.95 per month, or approx. $48,792 per year. With an inflation rate of approx 3%, you’ll need to save more for your retirement if you are in your 20s now than if you are in your 30s.

How much do you need to save to retire at 55, 60, or 65 years old?

Many professionals choose to 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 ‘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 AgeAmount Required for Retirement at 55 Years old Amount Required for Retirement at 60 Years old Amount Required for Retirement at 65 Years old
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.

Shocked?

Yes, I was too! When I calculate I need almost $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.

Example:

  • 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.

Recommendation:

Visit our library for some of the best books you should read to prepare yourself. These few books that I read have blown my mind and changed my life. Hopefully, they will help you as well.

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
  • Only 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.

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.

Read Also:

If you like our post, feel free to subscribe.

%d bloggers like this: