This Rule of Thumb Can Help Determine How Much You'll Need in Retirement
There's no one-approach-fits-all method when it comes to retirement savings. Different people will require different things. However, some guidelines help provide guidance and lead you in the right direction. This rule of thumb can help determine how much you'll need in retirement.
Retirement doesn't have to mean an abrupt lifestyle change -- especially if the cause is financial. While some aspects of your life will inevitably change in retirement, there are rules of thumb you can follow to help ensure you can maintain your current lifestyle. It begins with the 80% rule, which states that you should try to have 80% of your annual pre-retirement income in retirement. If you currently make $100,000, aim for $80,000; if you currently make $120,000, aim for $96,000; If you currently make $150,000, aim for $120,000.
Of course, not everyone will be interested in maintaining their current lifestyle in retirement. Even so, the 80% rule is a good baseline to begin for many people. If not for guidance on the annual income you may need, then at least for its role in helping people decide the total savings they should aim for in retirement.
Source Fool.com
