When it comes to retirement planning, one of the most common questions for couples is: How Much Do We Need to Retire?
While this answer will vary for everyone based upon their individual circumstances and how much they need to spend on an annual basis in retirement. The typical retired worker will spend $828,000. Adults 65 and over spend roughly $46,000 annually, according to the Bureau of Labor Statistics, and the average length of retirement in the U.S. is 18 years. Multiply $46,000 by 18, and you’re looking at a $828,000.
Generally, the rule is that you should set aside 15% of your paycheck for retirement savings, and the sooner the better. If you do so at an early age, you can hit the $1million dollar mark or more. For those who are extremely committed to living well in retirement or retiring early, they can even beat that by focusing on pumping as much as possible into tax favored retirement accounts at an early age and investing for passive income. Sadly however, statistics show that many do not take such an active interest or place a priority on retirement savings and the majority fall far short of what would be required to meet the $828,000 retirement of the average retiree.
Don’t be a statistic, start planning for retirement early and don’t underestimate the importance of pumping money into tax favored retirement accounts, getting an employer match (where offered), and placing an emphasis on your retirement investments from a young age. Smart Couples plan together for a successful financial life and a successful retirement.
Feel free to use the retirement calculators on our site to get an idea of what you will need to retire so that you can start planning.