Most people look forward to their retirement, but are often left wondering, how much money will I need to maintain my current lifestyle? One method for calculating how large your retirement nest egg should be is called the 4% rule. With this rule, you divide your expected annual expenses during retirement by 0.04 to calculate how much you should have in assets by the time you retire. This is just one method for calculating how much you should have for retirement. There’s no one-size-fits-all answer to this question, and each individual or family will need to look at their financial situation and retirement goals to determine what works for them.

Start Determining Your Path

One of the first steps to a successful retirement, is to set flexible retirement goals such as, retirement age, annual income, and other goals like travel expenses or a vacation home. Defining these goals can give you a more defined path to your financial independence. Once you have an idea of your ideal retirement goals, you need to consider what you’re doing to help make sure you achieve them. A great start is to make sure you’re contributing as much as possible to retirement accounts such as a 401k or IRA. A Financial Advisor can play a crucial role in helping you determine the most beneficial ways to save and invest during your accumulation years, to give you the best chance at achieving your goals.

Target Retirement Savings by Age

AGE	Annual Salary
30	1x Annual Salary
40	3x Annual Salary
50	6x Annual Salary
60	8x Annual Salary
67	10x Annual Salary

Expect the Unexpected

It’s generally a good idea to overestimate how much you’ll want to spend in retirement. This leaves room for unexpected expenses such as medical bills or house repairs. Additionally, inflation may be higher than expected or you may live longer than you originally thought.

Envision® Planning

The Newport Coast Wealth Management Group strives to guide our clients through retirement planning using our Envision Planning process. We create a personalized retirement plan for each client tailored to their specific goals, risk tolerance, and investment profile. This plan provides the framework for our clients during their accumulation and retirement years and gives them a better idea of where they stand in regards to funding their retirement.

Ready to Take the Next Step?

Request a call from the Newport Coast Wealth Management Group of Wells Fargo Advisors today. We will begin with a discovery call to learn about your personal situation and goals, and take your first step closer to Financial Independence.