How to Calculate Your Retirement Number

Retirement planning can feel like navigating a maze blindfolded. But fear not! Calculating your retirement number, the magic figure you need to live comfortably in your golden years, is simpler than it seems. Think of it as your financial GPS, guiding you to a worry-free retirement.

Start by estimating your annual expenses, factoring in everything from the essentials to the occasional splurge. This should include housing, utilities, groceries, healthcare, and transportation, but don’t forget the little joys like travel, hobbies, and dining out. Don’t forget to account for inflation—those pesky rising costs over time.

Next, consider your income sources, such as Social Security, pensions, and savings. Aiming for 80% of your pre-retirement income is a good rule of thumb, but your number might vary based on your lifestyle and health needs. Calculate how much you need to save by subtracting your expected income from your estimated expenses and then multiplying by the number of years you expect to be retired.

But don’t stop there. Revisit and adjust your number regularly as life changes. A bit of strategic planning today can lead to a more comfortable tomorrow. Your retirement number is more than just a figure—it's your ticket to financial freedom and peace of mind.