How Much Do I Need To Retire?

Happy older couple sitting together on a couch.

Worried about retirement planning? You’re certainly not alone. In fact, more than 70% of Americans  wonder if they’ll have enough money saved by their retirement age. Even those who contribute to a 401k plan or Roth IRA, may still worry if they’re doing enough to secure a healthy nest egg.

These “what if” factors can cause many individuals to feel stressed or avoid talking about retirement until it’s too late. At Trajan Wealth, we offer professional support and resources to help our clients feel empowered, not overwhelmed, when the topic of retirement savings arises.

We achieve this by providing personalized solutions that fit your needs today, tomorrow, and in the future!

In this article, we’ll discuss different retirement planning options, and why it’s important to work with a professional advisor to achieve the type of lifestyle you deserve.

Planning Your Retirement Savings

The reality is there is no magic number to save for when it comes to your own retirement. The reason? Everyone is different. Depending on your current income, future medical needs, and the type of retirement lifestyle you want to pursue, the number will vary greatly.

Retirement Savings Goals By Age

Most people with a 401k plan tend to “set it and forget it”—meaning they contribute a certain dollar amount each year, without taking into account market fluctuations, historical data, or salary increases.

It’s fair to say that as you get older, your annual income will increase. Therefore, your retirement contributions need to reflect this change, too. Remember, the more you can put into your retirement savings, the closer you are to enjoying the type of carefree lifestyle you’ve worked so hard to achieve.

There are different guidelines regarding how to save for retirement by age. A popular method is saving between 15-25% of your gross salary income, starting in your 20s. This approach will depend on how aggressive you want to (or can) be, however, as many 20 year olds will be starting out with student loan debt and entry level jobs, thus making a 25% contribution more difficult.

Other Retirement Savings Options

If you’re just starting out, you may decide to save 5% of your income per year.

Using this example, a person who brings home $50,000 per year will be paid about $1,900 every other week. Five percent of this paycheck is $96. By putting away $100 every two weeks, this individual can save for retirement without necessarily breaking the bank.

There is also the 4% rule to consider, as this approach involves dividing your desired annual retirement income by 4%. However, this strategy is highly dependent on loyal year in and year out contributions. Any deviations from this strategy will greatly impact your overall retirement savings and planning.

Retirement Savings and Investing

Let’s also not forget that a major component of retirement planning is also making the right investments. Many people know they need to invest. However, they are unsure how to get started, or whether they should be less or more aggressive to avoid risk. As a result, many rely more heavily on savings vs. investing.

This is why working with a professional financial advisor is essential. Your advisor will sit down with you to discuss your goals, financial strategy, and income to help you create a balanced retirement portfolio. One that provides ample income despite inflation, longevity and future expenses (medical, taxes, etc.).

Get the Retirement Planning You Deserve

Whether you’re just getting started, or you’ve been saving for your retirement for years, working with a professional advisor will ensure you’re on the right path to healthy, long-term retirement living. To learn how we can help you personalize your portfolio, mitigate risks, and make the right investments, contact us today!

© 2022 Trajan® Wealth LLC. Nothing in this blog is intended as investment advice, nor is it an offer to buy or sell any security. Please consult your financial advisor for questions about your personal financial situation. All investments involve risk, including the potential for loss. Trajan Wealth clients and employees may have a position in any of the securities mentioned. Portfolio holdings and other data are subject to change at any time and without notice. Additionally, the above links provided as a convenience and for informational purposes only; they do not constitute an endorsement or an approval by Trajan Wealth, L.L.C., of any of the products, services or opinions of the corporation or organization or individual. Trajan Wealth, L.L.C., bears no responsibility for the accuracy, legality or content of the external site or for that of subsequent links.

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