Quickly Figure Out Your Retirement Number with This EquationSaving Money

Quickly Figure Out Your Retirement Number with This Equation

Thorin Klosowski , Gizmodo Media

Quickly Figure Out Your Retirement Number with This Equation

Saving for retirement is all about figuring out exactly how much money you're going to need when you're older. If you're not really sure where to start, The Simple Dollar has an equation to get you started.

The calculation isn't exactly perfect, but it'll give you a rough estimate of what you'll need to save. You'll need to go through the following:

  1. Calculate 80% of your current salary.
  2. Factor in inflation by typing in 1.03(number of years until you retire).
  3. Multiply #1 by #2. This is what your salary will look like in the future with normal inflation.
  4. Subtract what you'll receive from Social Security (this is on your Social Security Statement) from the number you got in #3.
  5. Multiply the final number from #4 by 20. This is the amount of you'll need to save for retirement.

It's a bit complicated, but once you figure it out you'll have a rough estimate of what you need to save for retirement. Head over to The Simple Dollar for a more detailed explanation.

How to Quickly Figure Out Your Retirement "Number"| The Simple Dollar

Photo by U.S. Navy Imagery.

Contribute to LifeHacker

Write for Us

Comments ()

X
Sort By:
Be the first one to review.

Suggested for you

  • This Tool Calculates How Much Your Investment Fees Add Up Over Time

    This Tool Calculates How Much Your Investment Fees Add Up Over Time
  • How to Squeeze More Battery Out of Your Phone With Android Doze Apps

    How to Squeeze More Battery Out of Your Phone With Android Doze Apps
  • How Presidential Commutations and Pardons Work

    How Presidential Commutations and Pardons Work
  • Five Strategies That Gyms Use to Hook You in and How to Avoid Them

    Five Strategies That Gyms Use to Hook You in and How to Avoid Them
  • Five Steps to Help You Cut Your Cable Bill

    Five Steps to Help You Cut Your Cable Bill
  • The Google Assistant Commands that Work on Google Home, Pixel, and Allo

    The Google Assistant Commands that Work on Google Home, Pixel, and Allo
  • Deepfocus Mixes Ambient Background Noise With Music

    Deepfocus Mixes Ambient Background Noise With Music
  • The Biggest Complaints About 401(k)s

    The Biggest Complaints About 401(k)s
  • How Hackers Really Steal Passwords, How Close You Live to a Nuclear Bomb, and the Zero Waste Challenge

    How Hackers Really Steal Passwords, How Close You Live to a Nuclear Bomb, and the Zero Waste Challenge
  • Four Tips From Pediatricians to Teach Kindness to Kids

    Four Tips From Pediatricians to Teach Kindness to Kids
  • Why Leaving a Little Fat In Your Budget Can Help You In the Long Run

    Why Leaving a Little Fat In Your Budget Can Help You In the Long Run
  • A Crash Course In Finding the Right Foundation For You

    A Crash Course In Finding the Right Foundation For You
  • Suspension Trainer Showdown: TRX vs monkii bars 2

    Suspension Trainer Showdown: TRX vs monkii bars 2

Editor's Pick

  • How to Squeeze More Battery Out of Your Phone With Android Doze Apps

    How to Squeeze More Battery Out of Your Phone With Android Doze Apps
  • 10 Fashion Hacks That Will Change Your Life Overnight

    10 Fashion Hacks That Will Change Your Life Overnight
  • Unlock Your iOS 10 Devices without Touch ID or Home Button

    Unlock Your iOS 10 Devices without Touch ID or Home Button

Subscribe to latest stories

Trending on social



Subscribe for latest stories