For decades, many savers have had a big, round goal in their heads for their retirement future: A million bucks. It does have a nice ring to it, and presumably, if you reach millionaire status, your golden years should be very comfortable indeed. According to the latest findings by Fortune magazine, it seems that that big, round number we have all become accustom to shooting for will no longer be enough. So what's the new rule of thumb? Well retirement planners are saying based on conventional wisdom and dealing with the rate of inflation your new goal for retirement should be a cool $3 Million.
The news is sobering considering the facts. Many people anticipate that they will retire later than they actually do. The discrepancy can be seen in the latest Retirement Confidence Survey from the Employee Benefit Research Institute, the survey shows that while 38% of today’s workers expect to retire at 70 or older, only 4% actually left the workforce that late. Another factor to consider is your life expectancy according to AARP, today in the United States, people 100 and over represent the second-fastest-growing age group. Those over 85 are the fastest-growing segment of the population. With longer life spans becoming the new normal these days utilizing advances in health, diet, nutrition, medicine and quality of life, there is a good chance that you will need more money than you are planning for just on an annual basis if the years spent in retirement are longer than you think.
Some of the other things to consider as well are things such as health care in the long term or possibly and if you are banking on social security, the after-tax benefits of your check may not be enough to cover your particular needs. In 2017, the average monthly benefit for retired workers was $1,369, according to the Social Security Administration.
Depending on your own situation, lifestyle, goals and the type of retirement you hope to have, the actual amount you need to save for retirement may be higher than that number we all have in our heads.