While the thought of fully funding your retirement can be daunting, if you start planning now, you’ll surely be grateful later.
Retirement often entails replacing your previous annual salary with other sources of income to keep up with your lifestyle. While Social Security can cover part of your budget, the rest of your money will most likely need to come from save and invest.
CNBC put the numbers together, and we can tell you how much you need to save now to get $30,000 per year in retirement. — without taking a bite from your principal.
First, some basic rules. The numbers assume that you will retire at 65 and that you currently have no savings.
Financial advisors often recommend changing the mix of investments in your portfolio gradually to become more conservative as you reach retirement age. But even in retirement, you can still have plenty of stocks and bonds, as well as cash. For investments, we assume an annual rate of return of 6% when you are saving, and an even more conservative 3% rate during your “interest-only” retirement.
We also don’t take into account inflation, taxes, or any additional income you may receive from Social Security or your 401(k) plan.
Clock video above to learn more.
