{"id":1852,"date":"2015-04-22T00:15:34","date_gmt":"2015-04-22T08:15:34","guid":{"rendered":"http:\/\/www.cultofmoney.com\/?p=1852"},"modified":"2015-04-21T07:48:02","modified_gmt":"2015-04-21T15:48:02","slug":"3-ways-to-calculate-your-retirement-number","status":"publish","type":"post","link":"https:\/\/www.cultofmoney.com\/3-ways-to-calculate-your-retirement-number\/","title":{"rendered":"3 Ways to Calculate Your Retirement Number"},"content":{"rendered":"

\"Looking<\/a>I was listening to one of my favorite podcasts over the weekend and heard some shocking numbers.<\/p>\n

Did you know that 76% of Americans are living paycheck to paycheck<\/a>? How about the fact that less than half of Americans have more than $25,000 in savings and investments? And only 1 in 10 Americans even know how much they\u2019ll need for retirement!<\/p>\n

Let\u2019s not become a statistic. We\u2019ll start with resolving the easiest of these three problems: calculating what you need for retirement.<\/p>\n

Here are three ways to calculate your retirement number.<\/p>\n

Multiply Your Final Salary By 12<\/h2>\n

This is by far the easiest way to calculate your retirement needs. Let\u2019s say for instance you plan on earning $60,000 per year. You\u2019d simply multiply 60,000 by 12 for a grand total of $720,000 in retirement savings.<\/p>\n

This method assumes that you will receive social security and also used the 4% safe withdrawal rate.<\/p>\n

Multiply Expected Expenses by 25<\/h2>\n

I personally like this rule a little better. It\u2019s hard for me to determine what my final income will be and I also don\u2019t know if that final income number will be close to what I actually need in retirement.<\/p>\n

With the expense method I feel I have a little more control.<\/p>\n

To make this work simply take your expected expenses and multiply by 25. Since you won\u2019t be saving for retirement during retirement and you\u2019ll likely be debt free your expenses will probably be lower than what they are now.<\/p>\n

I like to think that I could more than comfortably live off $4,000 per month or $48,000 per year during retirement. If this holds true I\u2019d need $1.2 million dollars to retire.<\/p>\n

This method also assumes you\u2019ll receive social security and uses the 4% safe withdrawal rate.<\/p>\n

*Note that I didn\u2019t subtract expected social security benefits from my savings because I\u2019d rather be safe than sorry.<\/p>\n

Use a Retirement Calculator<\/h2>\n

Because there is SO much that can go into calculating your retirement number using an actual retirement calculator might be the safest way to go.<\/p>\n

With a retirement calculator you can enter your current savings, future savings, expected return on investment, and the age you want to retire. The calculator will tell you if your savings are likely to last that long. And if they aren\u2019t you\u2019ll know what to do instead.<\/p>\n

Some good retirement calculators are:<\/p>\n