Retirement. The idea of being done with work for good might be music to your ears. But thinking about how to fund the years after working is daunting for many.
The exact figure of how much money you’ll need for a comfortable retirement depends on many variables, including your lifestyle and where you live. A rule of thumb suggests you’ll likely spend about 80% of your working-life income in each year of your retirement.
It is also often said that $1 million in savings — from retirement plans to insurance policies, investments, and straight up cash — is a fair number to get you through retirement. Though everyone’s financial situation is unique.
Getting there requires planning, and incorporating saving for the future into your financial decision making today. It’s also the reason financial planners often tell you to get started as early as possible — it gives you more time to get to your goal amount, and might require fewer sacrifices along the way.
Here are some guidelines for how much you might want to consider saving.
| By age… | target saving this much |
|---|---|
| 30 | 1x your annual salary |
| 40 | 3x your annual salary |
| 50 | 6x your annual salary |
| 60 | 8x your annual salary |
| 67 | 10x your annual salary |
Where Can I Maximize Retirement Life?
Planning for retirement isn’t only about saving your way to a comfortable figure in your accounts. It’s also about planning the ‘where’.
While some people might prefer the idea of staying in the home they have known for years, others plan to move to warmer climates or closer to family. But beware, a new zip code can come with a whole host of new challenges for your finances.
Being retired means living on a fixed income, as your savings are likely disbursed to you in monthly increments. So a central question for retirees is which parts of the country are affordable.
The top five most tax-friendly states for retirement are:
1. Mississippi
2. Tennessee
3. Wyoming
4. Nevada
5. Florida
But there are other factors aside from the money that are worth considering, including access to high-quality medical care, resiliency when it comes to climate change, crime rates, and diversity.
Retirement is more than just the end of working life. It’s a whole new chapter.
SoFi’s retirement planning guide can help you start saving for retirement now. Investing for retirement earlier means you’ll be better prepared, whenever you choose to retire.
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