How much do I need to put aside to live comfortably in retirement?

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The answer you love to hate: it depends. Or, if you prefer: as much as you can. There is no such thing as saving too much for retirement. Saving for retirement doesn’t have to be complicated and difficult. The trick is determining how much money you will need and developing a plan to be sure you save enough. Here are some of the many factors that will affect the amount you ultimately end up saving:

  • Your savings rate. The amount you manage to contribute on a regular basis obviously influences the size of your savings. Consult your budget to see how much you can set aside.
  • How many work years remaining. The length of time you work and save will affect how much money you are able to put into savings, and the extent to which you’ll benefit from returns on your investments.
  • The type of retirement account you choose. Conditions vary depending on the account type you open. Most accounts have a yearly maximum contribution, meaning you can’t deposit beyond a certain amount in a given account.
  • The rate of return. Your money will grow at different rates depending on asset allocations and market conditions.
  • The number of years you will spend in retirement

If you want a rough estimate of how much you’ll end up saving under various savings rates, take advantage of the many online calculators—just be sure to try out more than one, because their answers vary depending on the formulas they use. But they all show that, with the magic of compound interest, consistency and time are your best bets for having enough for retirement!

But, how much will be enough? Social Security used to be considered a reliable source of retirement income, and on average you could count on it supplementing 30 - 40% of your income in retirement. In recent years, many people question whether the program is sustainable. When calculating how much to save for retirement, the best thing to do is assume no social security benefits. Here are some sample calculators to get you started: