What do retirees need

Their cost of living for items such as these goes down," Storey says. As you explore how much money you might really need in retirement, remember that the amount you decide to save and invest on your own is only one component of your future retirement income.

Most Americans will have Social Security as the backbone of their retirement savings. Even if benefit payments are reduced in the future, Social Security is not likely to go away. And don't forget about other sources of income that may be available to you many years from now, including the money in your workplace and personal retirement accounts, pensions, annuities, proceeds from selling your home or business, rental income or an inheritance.

Working in retirement: expectations vs. If you're planning to work in retirement so you can save less today, be realistic about your expectations. Understanding your post-retirement expenses and income can help you estimate how much you may need to draw from your personal savings each year in retirement.

However, it can be tough to turn that goal into a realistic amount to invest today when your goal is decades away. Here are two ways you can check on your progress to see if any changes should be made. How much should you be saving for retirement? With findings based on the Financial Wellness Tracker, consider using the following savings multiples as guidance for confidently replacing your income in retirement:.

Footnote 3. Source: Bank of America, April This example is hypothetical and does not represent the performance of a particular investment. This example assumes annual returns net of fees and expenses.

Your results will vary. Actual investing includes fees and other expenses that may result in lower returns than this hypothetical example. Whatever you save and invest today for the long term can make a big difference in the future. Next steps. Get insights on what percentage of your salary you should contribute to your k View 10 tips to help you boost your retirement savings — whatever your age Learn how many IRAs you can have — and how many you might want Looking for professional guidance?

Footnote 2 Note: Housing costs include mortgage or rent payments, property insurance, property taxes, utilities and maintenance. They typically go down in retirement because mortgages are paid off, property taxes are less due to downsizing, and utility bills are lower with fewer people in the household.

Footnote 3 This number refers to financial assets minus personal non-mortgage debt. Investing involves risk. There is always the potential of losing money when you invest in securities. This material should be regarded as general or educational information on Social Security considerations and is not intended to provide specific Social Security advice.

If you have questions regarding your particular situation, please contact your legal or tax advisor. Locations Contact us Schedule an appointment. Asset allocation, diversification, and rebalancing do not ensure a profit or protect against loss in declining markets. Merrill, its affiliates, and financial advisors do not provide legal, tax, or accounting advice. All rights reserved. I'd Like to. Copyright FactSet. While we're trying to present the broad strokes here, it's still a good idea to consult a financial advisor who can not only tailor a retirement savings goal to your particular situation but can also help set you on the right path with a savings and investment plan that can make sure you reach your goals.

By using the methods discussed in this article, you can get a good idea of how much you'll need to save in order to retire comfortably. Keep in mind this isn't designed to be a perfect method but a starting point to help you assess where you are and what adjustments you might need to make to get yourself to where you need to be.

David C. David's areas of focus are retirement savings, pensions, annuities, international pension and retirement savings systems, and PBGC. What is your advice for someone who may be worried about retiring because of recent financial setbacks? David John: If your health, family responsibilities and job status allows, continue to work longer than you might have before. The extra time allows you to save more and for the markets to continue to recover from past losses. Most important, delay taking your Social Security for as long as possible so you'll have a larger, inflation-protected benefit.

The Motley Fool: There are no hard and fast rules about when to retire or how much we should have saved, but what three pieces of advice would you give someone who is just starting their first retirement savings account?

Discounted offers are only available to new members. Stock Advisor will renew at the then current list price. Investing Best Accounts. Stock Market Basics. Stock Market. Industries to Invest In. Getting Started. Planning for Retirement. Retired: What Now? Personal Finance. As your habits stick, increase your contributions to your retirement plan so that you can have the money you'll ultimately need later in life.

Some financial experts may suggest paying off a mortgage isn't a high priority, thanks to low interest rates. Yet people who pay off their mortgage within five years of retirement are four times more likely to end up happier than those who don't, Moss said his research shows. Making extra payments or sending in more than the monthly amount due can help shave years off the life of the loan.

You may think you want to buy your dream home in a new locale or splurge on a recreational vehicle to tour the country. Yet what makes retirees happiest is spending money socializing with other people, according to CFP Michael Finke, a professor of wealth management at The American College of Financial Services. More from Invest in You: The ultimate retirement planning guide for Don't want to fully retire?

Here's when phased retirement may work Here's how to get your retirement savings on track. Spending on things like durable goods, cars, clothes and gifts doesn't significantly increase life satisfaction in retirement, according to his research. Time at the beach may be great when you are on vacation, but it could become boring after a while, he said. Three checks are better than one, psychologically speaking, even if they all add up to the same amount, Moss said.