How Much You Should Have Saved (by Age)

Retirement Income: the 80% Rule

Most experts say your retirement income should be about 80% of your final pre-retirement salary. That means if you are making $100,000 annually at retirement, you will need income of at least $80,000 per year to have a comfortable lifestyle after leaving the workforce. This amount can be adjusted up or down depending on other sources of income, such as Social Security, pensions and part-time employment, as well as your health and your desired lifestyle.

Total Savings: The 4% Rule

To determine the amount you will need to have saved to generate the retirement income you want, one easy-to-use formula calls for dividing your desired annual retirement income by 4%. To generate the $80,000 cited above, for example, you would need a nest egg at retirement of about $2 million. This assumes a 5% return on investments (after taxes and inflation), no additional retirement income (i.e., Social Security) and a lifestyle similar to the one you would be living at the time you retire.

By Jim Probasco | January 7, 2018 — 12:29 PM EST

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