How much money do I need for retirement? Take a look at your monthly spending. Your retirement spending will likely be less compared to what you are spending now. At retirement, student loans and mortgages will be paid off.
However, don’t forget to add healthcare and property tax expenses. A healthy couple can plan to spend about $280,000 for healthcare. Which is about $1000 per month. Property tax can range from 0.27% to 2.4% of your property value depending on the state you live in.
Once you figure out your monthly spending, multiply that by 12. This is your desired annual income at retirement.
Now, take a look at your current retirement saving accounts. This would be your 401k, 403b, SEP IRAs, Simple IRAs, Roth IRAs, HSAs, and Taxable Investment Accounts. Add them all up and see what you have currently. Also take note of how much you are currently saving annually. We will go more into the details of different types of accounts later.
Another thing to consider is social security. Monthly social security income will also start to kick in as early as age 62. You can calculate your estimate monthly social security income with this social security calculator.
Once you have the all the information above, take the time to plug them into a Retirement Calculator. Vanguard provide a simple and easy to use retirement calculator.