How much savings will allow you to retire in comfort?

Snow on Mount Rose as seen from the gorgeous fairways of the Jack Nicklaus signature course in our fabulous Montrêux community.

Retirement desires differ per individual. Do you want to golf every day? Travel the world? Shack up on Lake Tahoe? “People who have a retirement savings goal – even if that goal is a product of back-of-the-envelope-calculations – are vastly more likely to retire comfortably than those without one.” It doesn’t matter what your retirement goals are, there will be things you cannot plan for, such as your health and the stock market, and for these you must prepare. There are professionals that can guide you towards a comfortable retirement and if you are at all skeptical that you’ll be able to live the life you want post-retirement you should go see one. Until then, you can roughly calculate how much money you will need to retire comfortably based on your retirement desires.

What’s your multiplier?

Most professionals and retirement experts say that the average retiree will need to have saved 11-12 times their salary at the time of retirement to be able to live comfortably. This becomes an issue because if you are not close to retiring, you can’t pinpoint what you’ll be making when you retire. Author Charles Farrell in his book, Your Money Ratios, came up with multipliers. These are based on your current age and income and will give you an estimate of what you will need to make in order to replace 80 percent of your pre-retirement earnings. At each age you should have accumulated:

• Age 35: 1.4 times your annual income
• Age 45: 3.7 times your annual income
• Age 55: 5.1 times your annual income
• Age 65: 12 times your annual income

Stay calm.

Don’t fret if you are not at the point you should be, there is not one clear-cut path to retirement savings. For some, it’s putting away the proper amount of money each month/year and for others it means living on less and working a few more years. You can most likely live on less. Planners suggest that you plan to live on 70 – 80 percent of your pre-retirement income. This sounds like a more dramatic change than it really is when you consider you will no longer be saving for retirement or paying Social Security taxes. Some retirees can even live on only 50%.

Online calculators like this one from AARP can be helpful in the early stages of planning for your retirement.

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For real estate inquiries, stop by the beautiful Montrêux Welcome Center at 16475 Bordeaux Dr. in Reno, NV or call us at 775.849.9444. The Welcome Center is open 7 days a week, from 9:00 am – 5:00 pm.