Retirement-Needs Analysis Only 52% of workers have tried to calculate how much they would need in order to live comfortably in retirement. It’s probably not surprising that those who have calculated their needs typically have higher savings goals than those who “guess.” Moreover, workers who have done a retirement-needs calculation tend to be more confident in their ability to achieve their goals. Source: Employee Benefit Research Institute, 2024 Your financial professional can help you develop a comprehensive and systematic retirement-needs analysis. Here’s a simplified example to help you get started. Try it with your own numbers. *Assumes a 3% after-tax rate of return; the 20-year factor is rounded. This hypothetical example is used for illustrative purposes only. Rates of return will vary over time, particularly for long-term investments. Investments seeking to achieve higher rates of return involve a higher degree of risk. Actual results will vary. There is no assurance that working with a financial professional will improve investment results, but a professional who focuses on your overall objectives can help you consider strategies that could have a substantial effect on your long-term financial situation. Example 1. Annual retirement income desired $70,000 2. Subtract expected retirement income from other sources such as Social Security or a pension – $25,000 3. Income you need to generate from savings and investments $45,000 4. Savings needed to provide desired income for 20 years (line 3 x 15)* $675,000 5. Savings needed to provide desired income indefinitely (line 3 ÷ 0.03)* $1,500,000
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