# How much do i need to save calculator

- I've had some people ask me how to use this calculator if you want to retire before receiving any Social Security or pension benefits. Here's how to do it - it's a 2-step process:

- You're 40 years old and would like to retire at 55. You don't have a pension plan, but will start receiving about $1000 per month (in today's $) from Social Security at age 65. You need $50,000 per year (in today's $) to live on until you're 95 years old. You don't need to have money left when you die. You think you can earn 5% per year and assume inflation will average 3.5% per year.

**The assumptions:**

**First, do the calculation for the number of years you'll be receiving Social Security (age 65 to 95 years).**

- 25 = Years until you retire (begin receiving SS). (age 40 to age 65)
- 30 = Years receiving SS. (age 65 to age 95)
- 5 = Interest Rate
- 3.5 = Inflation Rate
- 38000 = annual amount needed to live on. ($1000 x 12 = $12,000 $50,000 - $12,000 = $38,000)
- 0 = amount left

**View Schedule**

**Now do the calculation from age 55 to 65 years.**

- 15 = Years until you retire. (age 40 to age 55)
- 10 = Years of retirement (not receiving SS). (age 55 to age 65)
- 5 = Interest Rate
- 3.5 = Inflation Rate
- 50000 = annual amount needed to live on.
- 2203771.99 = amount left (The amount from above needed at age 65, to carry you from 65 to 95yrs.) Do
**not**check the box to adjust for inflation!

**View Schedule**

You will need to save $ 2,138,749.78 by the time you retire at age 55, in order to have enough money to last to the age of 95. (Assuming all the above assumptions are met, of course.)

**On the Savings Calculator you will enter:**

- The $ amount needed at retirement in the
*Future Value*box

**Note:**You can copy the amount (not the $ sign) from the schedule and paste that to the Savings Calculator.

*Present Value*box.

Source: www.mycalculators.com

Category: Personal Finance

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