TOOLS: Calculate Amount Needed For Retirement

Welcome to the latest series on the wildly popular website – www.JosephSangl.com!  With this series, I will be sharing how you can  use some of the calculators from the "TOOLS" page to take your financial plan to the next level.

One of the things that I do as part of both of the classes that I teach is to have people calculate how much they will need to retire well.

The calculation usually yields what I call an "Oh crap!" Moment with the majority of folks responding with "YIKES!" and "Oh no!".

I have people calculate this number for the following reasons:

  1. Most people have never seen how much they will need to retire well.
  2. When people realize how large the number is, it helps them realize how important it is to have a solid plan.
  3. It hammers home the point that investing needs to start early and often.

So, how much DO you need for retirement?  Well, it is really simple to calculate with the Retirement Nest-Egg Required Calculator

Here are couple of things to note about this retirement calculator

  1. This calculation assumes that you will never touch the principal.
  2. This calculation assumes that you will give your nest-egg a "cost-of-living-raise" of 4% each year.
  3. This calculator adjusts the "annual amount you want" for average annual inflation of 4%.

Below is a calculation I ran for an "annual amount I want" of $75,000.

 

Note that the calculator shows that with 4% annual inflation, I will need $295,957 per year in 35 years to have the same purchasing power that $75,000 has today.

If I expect my retirement nest-egg to grow at an annual rate of 8%, then I will need $7,398,917 when I retire.  If I expect my retirement nest-egg to grow at an annual rate of 12%, then I will only need $3,699,458.

So …  What's your number?

In the next post, I will share a tool that helps you determine the amount you need to save each month to fully-fund your nest-egg.

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3 Responses to “TOOLS: Calculate Amount Needed For Retirement”

  1. Moises Manygoats September 29, 2010 at 9:20 am #

    Good Day, I Really like your blog I would hope to write an article for your site as well. I am interested in travel but would also be interested in other articles I have written many articles that you can see here: Seattle Car Hire if you like them and let me know.

  2. Mark Riddle October 14, 2012 at 6:17 pm #

    At first glance, these retirement calculations are depressing. But they should motivate us to start investing TODAY for retirement, if we are going to have a chance of meeting the goal.

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