While the thought of properly funding your retirement can be daunting, if you start planning now, you’ll certainly appreciate it later. It’s never too early to start thinking about retirement, and it may not be as difficult as you think.
Retirement typically involves replacing your annual salary from a workplace with other sources of income to maintain your current lifestyle. While Social Security may cover part of your budget, it’s understandable that there are reasons to worry about how much you might receive from Social Security when you retire. The rest of your money will most likely need to come from your savings and investments.
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CNBC crunched the numbers and we can tell you how much you need to save now to get $80,000, $90,000 and $100,000 each year in retirement, without taking a bite out of your principal.
First of all, there are some basic rules. The numbers assume that she will retire at age 65 and currently has no money saved.
Financial advisors generally recommend that the mix of investments in your portfolio gradually change to become more conservative as you approach retirement. But even when you retire, you’ll likely still have a mix of stocks and bonds, plus cash. To invest, we assume a conservative 6% annual return when you’re working and an even more conservative 3% rate during your “interest only” retirement.
We also don’t account for inflation, taxes, or any additional income you might get from Social Security or your 401(k) investment plan.
We’ve got a complete breakdown of how much you need to save now whether your goal is to reach $80,000, $90,000, or $100,000 each year in retirement.
Look the video above for more information.