How Much Do I Need To Save For Retirement If My Goal Is To Retire In 30 Years?
Saving for retirement can often be very tricky, especially with the demands of day-to-day finances, paying for college educations, and the more recent expense of boomerang children wreaking havoc on your finances. In addition to difficulty with saving, there are many unknowns that shadow retirement saving, making it seem lofty and unattainable for the average American. In many cases, it’s easier to meet a goal if you are aware of what you need and in what time frame you need it. According to many financial advisors, if you’re goal is to retire in the next 30 years, you will need to come up with $82.28/day every day, for the next 30 years to meet that goal.
How Much Is Enough For Retirement?
If $82.28/day seems like a rather large amount, it’s actually based on the assumption that you will want to live on roughly $50,000/year. In order to make that, your $82.28/day needs to be invested in a fairly aggressive portfolio with a 7% return, for 30 years. This figure also takes into account cost of living adjustments for inflation, which is figured to be on average about 3%/year. For the average person out there, this amount will be enough for you to survive on for the duration of your retirement.
How Will I Ever Save Enough For Retirement?
As a younger individual with the demand of family expenses, trying to come up with an additional $82/day may seem like a daunting task. However, the younger you are when you begin saving, the more of a chance you have of meeting your retirement goals. For instance, if you began saving at the age of 20, and were able to save for 45 years instead of 30 years, you’re savings rate will have to be much lower. Additionally, the $82.28 is not adjusted for inflation. Meaning, even though that seems like a large chunk of change right now, in 20 years it will actually be much easier to save $82/day because of the inflation rate.
The Bottom Line Is: Before you allow yourself to become discouraged and throw in the towel entirely for retirement, it’s mostly important to recognize that retirement savings requires a diligence and preparedness on the part of the investor. Your retirement nest egg is not going to form itself, and in order to prevent yourself from becoming a burden on your loved ones in the future, getting on the right track for retirement today is going to be of the utmost importance. To learn more about how to get prepared for retirement, and where to invest your hard earned assets to generate the return you will need to retire comfortably, contact a Redhawk Wealth Advisor near you today.