It’s never too early to begin setting a retirement goal. Whether you are 30 or 50, consider these steps to establish your own goals:
- Determine how much annual income you’ll need to maintain your lifestyle — Because you’ll likely have fewer expenses — your house, car, and debt may be paid off, for example, and you may no longer owe payroll taxes — the U.S. Department of Labor estimates that you’ll need about 70 percent of your pre-retirement income during retirement.
- Account for inflation — Start with 2 or 3 percent of the amount you’ll need for retirement. You’ll also need to estimate the number of years you’ll spend in retirement. This will help you determine the annual income you really need in retirement.
- Determine how much money you’ll receive from Social Security — Start by visiting the Social Security Administration’s website, where you can sign up to receive an estimate of your future benefits. Subtract your expected annual benefits from your target annual income. If you’ll receive a pension, subtract that income, too. This is the annual income your retirement savings must yield.
- Input all of this information — You can do it with an online savings goal calculator, which will help turn your final retirement target into a manageable monthly savings goal.