If you’re like most people, you’ve probably wondered ‘How much do I need to retire?’
Any time retirement comes up, we HAVE to talk about saving. After all, that is going to be the number one thing that determines ‘how much do I need to retire’.
So how much do I need to retire?
You’ll need to save 25x your annual retirement expenses. That seems like a lot, right? Well, it’s not as much as you think once you realize that you won’t need to save all of that from your paycheck. By making smart investments and starting early, you’ll see that it’s possible to get there.
If most people are in debt, then clearly saving isn’t that easy! Look, we write A LOT about how saving money isn’t easy at first. We know because it’s something we struggled with too. So what’s the point of this? Why not just take the easy way out and spend every penny the month it hits the bank?
The point of all of this is to:
1. Be financially independent
2. Increase your quality of life
We can’t think of many things that would increase our quality of life like not having to work for the rest of our lives. Who wouldn’t want to have the flexibility to be able to decide how to spend their time? Well, that’s the whole point of this retirement calculator!
We built this retirement calculator because none of our friends or family members could give us a good answer when we asked them how much they needed to save for retirement. Literally none.
If you plan on retiring one day, you NEED to know when you can finally stop working! You need to be able to answer: “How much do I need to retire?”
What’s our methodology?
We wanted to keep our calculator simple to use while giving you a good estimate of what to aim for as you plan.
We used the ’25x Retirement Rule’. The 25x rule is an easy way to help you answer ‘How much do I need to retire’. The rule says that if you save 25x your annual expenses in retirement and have a 4% annual withdrawal, this should last you at least 30 years (barring any economic catastrophes in the early years of you retirement). For example, if you are going to spend $60K per year during your retirement, then your retirement savings goal should be $1.5 million. This is because $60K x 25 = $1.5 million.
If you plan to have a longer retirement then you should save more. If you plan to have a shorter retirement you can save less.
This tool shouldn’t be viewed as the holy grail. It is only a guide to help you start your planning. Based on our loved ones, this guide will be a million times better than what most people are using to determine how much they’ll need to retire!
How to use the retirement calculator:
It’s so easy! Simply enter your info into the awesome retirement calculator and we’ll show you your estimated MONTHLY saving goal! If you aren’t sure how much money you need to save for retirement, then look no further! You won’t find an easier retirement calculator anywhere. Once you finish, head over to our guide to learn what to do with your money!
Comment below to let us know 1 specific thing you are going to start doing to get on track for retirement.
To get us started, we are going to cut down our electric bill by spending more time going for walks instead of watching tv!