As you work with your financial advisor to build a retirement savings program tailored to your goals, risk tolerance and time horizon, try to determine as accurately as possible how much you’ll need.

To get a general idea, you can use one of two approaches, depending on how soon you intend to leave the work force.

  • Five or more years from retirement. If you’re five or more years away from retirement, many experts believe that you should figure on needing roughly 80% of your pre-retirement income, multiplied by the number of years you’ll spend drawing down your resources.
Preretirement Incomex80%xYears of RetirementEstimated Savings Needed
$45,000x.80x25 Years= $900,000


While the answer you get will be in today’s dollars (rather than in tomorrow’s inflated ones), it will give you a ballpark figure of what it will take to maintain your pre-retirement standard of living.

  • Five or fewer years from retirement. If you’re five or fewer years from retirement, it’s smart to create a detailed budget identifying all your projected annual living expenses. Remember, certain costs, such as transportation, clothing, recreation and medical expenses, are likely to change as you transition from work to a lifestyle in retirement.

Use this retirement income calculator to help determine your retirement income needs and see if you are on track with your retirement savings.