How Much Money Will You Need for Retirement?

"Will I outlive my retirement money?" That's one of the top fears for people who are starting to prepare for their retirement years.

So I have to chuckle a bit when I see headlines that say, "Here's how much money Americans think they need to retire comfortably," in a recent article on FoxBusiness.com.¹

$1.9 million is the number, according to a nationwide survey of 1,000 employed 401(k) participants by a well-known financial services company. In 2019, the same survey reported the number was $1.7 million. But this year's pandemic increased the total by $200,000.²

Is $1.9 million a realistic figure for retirement? It's hard to say. The survey didn't ask participants how they arrived at that figure or what information they used to draw that conclusion.

How much you need to save for retirement is unique to your situation. What may be right for you will depend on your retirement expenses and the income you expect to help cover them.

It's important to have a comprehensive view of all the sources of income you might draw from after you retire.  Just how big your nest egg should be and how long it might last will depend not only on what you save and invest, but also on how you spend it once you do retire. 

Determining how much money you need in retirement is a process. It shouldn't be a number that you pull out of thin air.

The process should include looking at your current financial situation and developing an approach based on your goals, time horizon, and risk tolerance. The process should take into consideration all your potential sources of retirement income, including the money in your workplace and personal retirement accounts, pensions, annuities, proceeds from selling your home or business, rental income or an inheritance.  

A significant figure like $1.9 million does little good if you're uncertain what it means for your retirement years.  Your Turning Pointe Financial advisor has the planning tools and resources that can help you develop a retirement strategy and show you investment ideas designed to help you pursue the retirement of your dreams.  Cheers to a bright future!

^{1. FoxBusiness.com, August 4, 2020}

^{2. Pressroom.aboutshwab.com, August 4, 2020}

^{Investing involves risk, and the return and principal value of investments will fluctuate as market conditions change. When sold, investments may be worth more or less than their original cost. Past performance does not guarantee future results.}

^{The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.}