Locate A Branch
a couple in their late 40s sitting on the sand at the beach overlooking the ocean

How much money do you need to retire comfortably?

April 15, 2016

How to accurately plan for retirement and calculate how much money you will need

Are you thinking about retirement? The first question that is commonly asked, is “How much money do I need to retire comfortably?” To answer this question, where are a number of considerations that need to be kept in mind. For example, how long have you been saving money, and what financial goals have you set yourself?

You also need to consider your weekly and monthly expenses. How you can limit these expenses in order to save money, without cutting out the important things that you absolutely need to enjoy a happy and healthy lifestyle?

To save money for retirement, start by planning your expenses

In order to save money successfully, it's an excellent idea to plan for your expenses. For example, if you are planning to purchase a new home or car, or are planning to embark on a much-needed vacation to the Bahamas, you should plan out your expenses as minutely as possible and begin saving well in advance. It's also a good idea to differentiate between short and long-term goals. The above listed examples fall under the heading of short-term goals. Planning for retirement, on the other hand, is a long-term goal that requires years of careful planning and saving.

Start setting some retirement goals

Your retirement goals need to be realistic and attainable. Start by deciding what you plan to do during your retirement years.

  • Will you stay where you are, move closer to family, or perhaps move to a warmer climate?
  • Will you own a home, or rent?
  • Will you continue to invest, or cash in your investments and live off of them?
  • As you age, do you think you will want to join a retirement community or hire a caregiver or driver to help you?
  • If you have children, how would you like your savings to impact their lives?

Map out what you want your retired life to look like as best you can. Calculate how much money you anticipate needing on a monthly basis. The sooner you set realistic goals concerning your retirement, the sooner you'll be able to begin planning for it.

Investment Strategies For Meeting Your Goals

There are a number of effective investment strategies that work particularly well when achieving short-term goals. The easiest way to put money aside to reach a short-term goal, is to open a regular savings account and tighten your budget where you can. If you want to accumulate savings quickly, a high-yield savings account might be the best way to go.

When it comes to answering the question of how much money you need to retire, you might want to consider investing in securities, such as mutual funds or stocks. Check to see if your employer has a 401(k) matching program, and consider investing for your retirement there. You may also prefer to invest in an IRA account that is insured by the FDIC.

Have a question? We’re here to help.