How much money do you need to retire? - 13 WTHR Indianapolis

Elaine Bedel, financial expert, writes about saving for retirement. Check out her website here.

A question often asked is "How much do I need at retirement to meet my living expenses?" The answer depends on how much you want to spend in retirement.

Is there a good indication of how much you will be spending in retirement?

Start with what you are spending today, subtract those expenses that are related to work and add new expenses in retirement. A general rule of thumb is 80 percent of what you spend today, but you need to be careful to include any medical expenses.

For someone age 45 now, what do they need to have in savings to meet their living expenses in retirement?

For someone age 45, retiring at 65, and living to 95:

• If you have $150,000 in savings today invested 60% in stocks and 40% in bonds and you want to spend $50,000 per year in retirement (increased by 3% annually), you need to save $24,000 per year ($2,000 per month).

What if you can only save $1,000 per month?

If you save $12,000 per year ($1,000 per month), then you can spend $35,000 during retirement.

For comparison, what if you only have the $150,000 that remains invested for the next twenty years, and you can't save anything else? What will you be able to spend in retirement?

If you save nothing more, then you can spend $20,000.

What should viewers do to get a handle on what they can safely spend in retirement?

Determine what savings you have that is dedicated to retirement, determine what amount you can reasonably save and use a calculator to determine what you can safely spend without fear of running out of money.

How Much To Save for Retirement

Work with a financial planner to get a better idea of your preparation for retirement based on your individual situation. A planner can assure you have your assets invested appropriately and perhaps be able to help review your budget for ways to save more money.

The earlier you start planning for retirement, the easier it will be to meet your retirement spending goal.