While the thought of adequately financing your retirement can be daunting, if you start planning now, you’ll definitely be grateful later. It may not be as difficult as you think.
Retirement usually entails replacing your one-time annuity from the workplace with other sources of income to maintain your current lifestyle. While Social Security may cover part of your budget, the rest of your money will likely come from your savings and investments.
CNBC crunched the numbers, and we can tell you how much you need to save now to get $70,000 each year in retirement — without taking a premium from your manager.
First, there are some ground rules. The numbers assume that you will retire at age 65 and that you currently have no money in savings.
Financial advisors usually recommend that the mix of investments in your portfolio gradually shift to become more conservative as you approach retirement. But even after you retire, you’ll likely have a mix of stocks and bonds, as well as cash. For the investment, we’re assuming a conservative annual return of 6% when you’re saving and a more conservative rate of 3% while you’re in “interest-only” retirement.
We also do not take into account inflation, taxes, or any additional income you may receive from Social Security or your 401(k) plan.
He watches the video above to find out more.
“Reader. Infuriatingly humble coffee enthusiast. Future teen idol. Tv nerd. Explorer. Organizer. Twitter aficionado. Evil music fanatic.”