Retirement is expensive. How much money you will need each year when you stop working depends on your individual circumstances and the kind of lifestyle you expect to live. Your estimate will be the starting point of your retirement plan and will drive many of the other planning decisions you make, including those regarding Social Security benefits, your retirement date, and how much you need to save in the interim. There are two ways to arrive at this important number.
The most popular method is called the Income Replacement Ratio. It is the percentage of your working, pre-tax income needed …Read More