How Much to Save Monthly for $1 Million Retirement?| SafeMon

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Discover how much to save each month for $1 million in retirement. Learn effective strategies and explore safe money alternatives today! It’s time for the million-dollar question. Literally. How much do you need to save to have $1 million in retirement savings? Apparently, if you’re 21, you only need to save $25 a week to be set for a comfortable retirement. Ah, to be 21 again. Because that ship sailed long ago for us, we need to make sure that we are financially prepared for our retirement. $1 million seems to be the magic number that comes up often when we talk about retirement savings. This is based roughly on the idea that you can fund your retirement with a 4% draw, supplement with Social Security, and have enough money for a 30-year retirement with a comfortable, if not extravagant, standard of living. But with lingering low interest rates, market volatility, and lengthening average lifespans, a 4% withdrawal strategy may not work for many Americans. What to do about it? How Much Should You Save for Retirement Goals? So, how much should you be saving? Well, it depends on your current age and when you plan to retire. Your saving habits to date also need to be taken into consideration. However, if you’re in your 50s, and haven’t been saving sufficiently, you will need to make some changes to the way you manage your money to have enough money saved and invested to see you through retirement. For example, say you are 50 years old, plan to retire at 67, and currently have about $100,000 in retirement savings. You earn around $70,000 a year and are saving your maximum contributions of 8% and expect an annual return of 5% on your investments. You may also receive approximately $1,500 each month from Social Security. Your mortgage is paid off, so you only anticipate needing about 70% of your current earnings to retire with a comfortable lifestyle and be prepared for any unexpected expenses. Based on these assumptions, you expect to need around $4,000 in monthly income (which is approximately 4% of $1 million) but are only going to save enough for $2,300. This means that if you want to meet your goal, you need to save almost 45% of your current salary to have sufficient retirement funds to meet your expected needs. Don’t panic. First, you may be over-estimating how