It’s a common question and critical for all Americans: How much is enough income to save for retirement? Saving up for the time when you are no longer working should be your financial priority after meeting your basic needs for food, electricity, housing, commuting to/from work and an emergency fund (and for a family, if you have one). If you don’t have enough left over for retirement savings after meeting those basic needs, you might need to look for ways to trim those expenses.

Back to that essential question: How much of your income do you need to save? Personal finance experts, myself included, often give 10 percent as a bare minimum guideline. But while saving any amount is better than nothing, the truth is that 10 percent really isn’t enough for most people. Here’s why, plus an explanation of how much you really need to save if you want to retire on time and in comfort.

Start with the 4 Percent Rule

The percentage of income you should save for retirement depends on your age now, the age at which you hope to retire, the annual rate of return you expect to earn on your investments and the annual income you want to enjoy in retirement.

To calculate that percentage, start with the 4 percent rule, which says that most people under most market conditions will avoid depleting their retirement savings by withdrawing 4 percent in year one, then adjusting that sum for inflation each subsequent year. Working backwards, you can use your desired annual retirement income to calculate the sum you need to retire. If you want to have $50,000 a year in retirement (including money that will go towards taxes), divide that by 4 percent to get $1.25 million.

If you save 10 percent of your income (including any employer retirement savings match, which could make your own contribution, say, 7 percent), it will take you 45 years to reach your retirement goal, assuming a 6 percent annual rate of return and $0 existing retirement savings. Ten percent might be fine if you’re 22 years old and don’t mind planning to work until you’re 67. For most people, however, 10 percent won’t be enough.

Don’t Rely on ‘One Size Fits All’

You can easily perform calculations for your own situation using this excellent Google spreadsheet created by Rob Berger, founder of the personal finance website DoughRoller.net. Just create a copy of the spreadsheet, enter your current annual income after taxes and your current retirement savings, and use the rows and columns on the right to figure out your required savings rate and years to financial freedom, as Berger likes to call it. Or use the lower portion of the spreadsheet to base the calculation on your desired annual retirement income before taxes.

Here’s another example: What if you’re 42, have $100,000 saved so far and want to retire at 55? You’ll need to save 45 percent of your income for the next 13 years to reach that $1.25 million goal, mentioned above. If your investment returns are higher than 6 percent, it will take you less time; if they’re lower, it will take longer.

Of course, complicating the picture is that different experts have different theories about how much you need to save. There’s the rule of 25, which says that you need to save 25 times your annual retirement expenses before you can retire, and the rule of 20, which says you only need to save 20 times your annual retirement expenses to retire. If you want to have $50,000 a year in retirement, Berger’s formula says you need to save $1.25 million. The rule of 25 also says you need to save $1.25 million, but the rule of 20 says you need to save only $1 million. Try another calculator and you’ll probably get yet another target to aim for.

Regardless of where you’re starting and what percentage of income you’re trying to save, taking enough risk by investing in stocks and keeping investment expenses minimal by choosing low-cost ETFs and mutual funds are essential to meeting your goal.

Retirement Calculations: An Educated Guess

Many variables can complicate this calculation as you move toward your goal. You might have a huge expense that derails your savings for a year or more. You might pay off a major expense and free up more of your income for savings. You might develop an illness or disability or need to care for someone else, causing you to cut your hours or forcing you into early retirement. You might overcome one of those hurdles and be able to save more as your income goes back up. Your investments might perform better or worse than you expect.

The most important thing is to have a target and make steady progress toward it. Whether you get to $1.25 million or $1.5 million isn’t going to make or break your retirement, but having only $100,000 because you didn’t make a plan surely will.

If you use a spreadsheet like Berger’s or another formula to redo the math every year based on how much you’ve accumulated so far, what returns you’re projecting and the percentage of your income you can afford to save at that time, you’ll stay on track. The sheet also underscores the importance of starting early and saving aggressively so that your investments have more time to compound and you don’t have to scrape together as much.

If you didn’t start saving for retirement as soon as you got your first job, it’s too late to correct that now. But you can do your best going forward, and that means starting today. Even if you’re already 65 and you can only hope to save up $50,000 by the time you expect your health to push you out of the workforce, that money will give you more say over your future than being broke will.

The Value of Thoughtful Planning

All retirement calculations are estimates. Life circumstances and market conditions are always changing, so there’s no way to come up with foolproof numbers. To be on the safe side, spend no more than you must. Find that balance between making enough present sacrifice to provide for your future without being miserable today. Yes, you could get hit by a truck and die tomorrow, but probably not. And there are plenty of ways to enjoy yourself now without spending a lot.

Financial freedom doesn’t mean buying everything you want—it means having enough money in the bank to have options about major life decisions like where you work, where you live, where and when to travel, how to give to others and when to retire. Gaining that freedom requires careful planning for the future and making thoughtful, intentional spending and savings decisions every day.

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