I’m 47 and am trying to figure out what my retirement savings goal should be

A Reddit user is 47 years old and is trying to figure out how much to invest for his future. He turned to the Internet to try to get an idea of what people were shooting for, and asked if most people were attempting to save $1 million, $5 million, $10 million, or some other amount.

So, what did other Redditors say, and how should the original poster (OP) get clarity on the amount of money he is going to need to have as a retiree?

Retirement savings goals are personalized based on your spending needs and target retirement age

The responses to the OP’s post from individual Redditors were all over the map.

For example, one person said they were aiming for between $4 and $5 million in today’s dollars invested for their retirement years. Another said he had once thought $2 million would be enough, but had now more than doubled his goal as he realized what living off his nest egg at a safe withdrawal rate would look like.

Still others said their target was $8 million or $10 million, while there were a few people who took the contrary position and said you may not need as much as you’d think, because you may want to work a little as a retiree and that can significantly reduce the amount you need saved.

There is a good reason why there was so much variation here.  There is not one correct number for retirement savings because everyone is coming from a different financial place. Factors like your current income, your spending preferences, whether you stand to inherit money, your health status, your family size, and a whole host of other issues can all affect the amount that you are going to need to have a comfortable life as a senior. 

How can you set your personalized retirement goal?

Since there is no standard amount that a person should have saved for retirement, the big question that the OP has remains unanswered by the Reddit posters who responded to him. It doesn’t really matter how much other people want to invest. The OP is going to need to decide for himself what the right amount is, and this can be done in a few ways. 

Ideally, the OP will decide how much spending he needs to cover in retirement based on his actual planned expenditures. Many people have a hard time doing that, but a simple rule of thumb says you should replace around 80% of your pre-retirement income — although some people go as low as 70% and others go up to 90%. Once the OP has his estimated income number, he can multiply it by 25 to get an idea of how big his nest egg needs to be. So, if he wanted $100K in income as a retiree and planned to follow the 4% rule, he’d need $2.5 million.

If the OP isn’t sure of his income needs, there are other rules of thumb he could follow as well, such as assuming he will need 10 times his final salary saved by the time he hits retirement. 

All of these are just general methods of calculating retirement income, though. And they may rely on assumptions that don’t work for the OP, or that are outdated. For example, the 4% rule has recently been revised by experts down to a 3.7% rule if you don’t want to risk running short of funds. Because there are so many variables and each situation is so different, the best option for anyone who wants a secure retirement is to talk with a financial advisor.

An advisor can work with you to make your own personalized plans that aren’t just based on generics but that allow you to set a goal based on the life you want to live. Since your security as a senior depends on it, it’s well worth finding the right advisor to help you make an informed choice.