Wednesday, September 12, 2012

Enough to REtire

Fidelity’s new guide estimates that workers should save at least eight times their salary by the time they retire at age 67, in order to replace 85% of their pre-retirement income. (To reach that 85% replacement rate, Fidelity adds in expected Social Security benefits.) The guide offers specific age-based savings goals to meet along the way.
Retirement savings
300.5 times current salary
351 X
402 X
453 X
504 X
555 X
606 X
657 X
678 X
For example, Fidelity says that a 35-year-old should be on track to cover her basic retirement expenses if she’s saved one year’s worth of her current salary and she continues to save at a specified rate until she retires at age 67. For a 40-year-old, it’s two times salary; for a 55-year-old it’s five times salary.

Also, Fidelity assumes you’ll work and save continuously until you’re 67, and will die at 92. Your investments will earn an annual 5.5% along the way, and your salary will grow 1.5% a year over and above a general inflation rate of 2.3%, according to Fidelity’s assumption

Interesting to me at least, of course, I am retired, I certainly hope I have that much!  

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