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How Much Do I Need to Retire?
Think about the life you want to lead and what it will cost.
According to Merriam-Webster, a rule of thumb is a general principle, broadly correct, but not intended to be scientifically accurate. Which is good to keep in mind, because when it comes to retirement savings, there are thumbs a-plenty: There’s the 80 percent rule, whereby you should look to replace 80 percent of your preretirement income. The rule for saving 10 times your income at the age of 67. The 4 percent rule for how much money to safely withdraw each year.

None of these “rules” were written by someone who knows you and the life you want to live in retirement. Take time to consider what your personal expenses will be so you can work backward to figure out what you should save.

To Know What to Save, You Must Know What You Spend

Keep in mind that many retirees spend less on certain items as they mature (such as housing) but more on others (such as health care). Here are the average monthly expenses of older Americans from three different age groups, taken from the Bureau of Labor Statistics’ most recent Consumer Expenditure Survey.
*What is Other? The Bureau of Labor Statistics categorizes all “other” expenditures as cash, personal care products, insurance, alcohol and tobacco and miscellaneous expenses.
*What is Other? The Bureau of Labor Statistics categorizes all “other” expenditures as cash, personal care products, insurance, alcohol and tobacco and miscellaneous expenses.
*What is Other? The Bureau of Labor Statistics categorizes all “other” expenditures as cash, personal care products, insurance, alcohol and tobacco and miscellaneous expenses.
*What is Other? The Bureau of Labor Statistics categorizes all “other” expenditures as cash, personal care products, insurance, alcohol and tobacco and miscellaneous expenses.
*What is Other? The Bureau of Labor Statistics categorizes all “other” expenditures as cash, personal care products, insurance, alcohol and tobacco and miscellaneous expenses.
What Do You Personally Need?
Enter your own estimated expenses in retirement, using Vanguard’s expense worksheet.
Did You Know?

The most recent Gallup Economy and Personal Finance Survey found nearly 40% of Americans believe they’ll retire after age 65.

 

Did You Know?

According to Statistic Brain, 6,100 Americans turn 65 each day.

 

Did You Know?

The average retirement plan account balance for Vanguard participants is $96,288.