Quickly Figure Out Your Retirement Number with This Equation
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:
- Calculate 80% of your current salary.
- Factor in inflation by typing in 1.03(number of years until you retire).
- Multiply #1 by #2. This is what your salary will look like in the future with normal inflation.
- Subtract what you'll receive from Social Security (this is on your Social Security Statement) from the number you got in #3.
- 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 DollarPhoto by U.S. Navy Imagery .