How much money do you need to save for retirement? That's a good—and complicated question.
Let's keep it simple. For now, you're going to nail down a ballpark figure.
Goose egg or nest egg?
Use online calculators with caution. They tend to be crude, because they assume or leave out key details.
We recommend the CNN/Money calculator to jump-start your planning process. It shows you where you're headed at your current rate of savings; where you'd be if you made certain adjustments, and how inflation plays into your plan.
To maximize this or any online calculator, do some prep work so the details you enter are as accurate as possible:
- Add up the balances in your 401k and IRA accounts.
- Figure out how much Social Security you're likely to get (read a recent statement or use this government site).
- Calculate your home equity and other saving/income sources.
If there's a fact you can't provide, make an educated guesstimate.
While your ultimate retirement plan will be comprised of multiple moving parts, getting a ballpark for your target nest egg is a vital first step. We hope it will inspire you to save regularly and invest wisely.
|Note to Readers: We appreciated the heated debate sparked by yesterday's post on haggling. Read our thoughts here.|