The Truth About Savings and Retirement
Is there a magic number?
Everyone wants to know the magic number needed in savings for a great retirement. As a result, there is no shortage of articles on the topic.
Here Are Three Different Thoughts
An April 18, 2024, article on cbsnews.com stated that most Americans think they need at least $1.46 million to retire comfortably. If that were accurate, I would be in BIG trouble!!
Another article from Fidelity, dated February 15, 2024, stated that you should have ten times your last annual income by age 67. So, if your income was $40,000, you should have at least $400,000 in savings. That was another retirement threshold I failed to reach. If I had waited for ten times my income, I would still have been working full-time.
Then, there is the theory that you need 80% of your pre-retirement income. That would mean you should have enough savings to supplement Social Security to achieve that goal. So, if your income pre-retirement was $100,000, you would need $80,000 ($6,666 monthly). If Social Security provided $3000, you would have to generate an additional $3,666 monthly. Using the 4% rule would mean you should have $1,100,000 in savings. All I can say to that is, “Phew!” I'm glad that doesn’t apply to me either.
