# How much should i be saving each month

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The question "How Much Money Do I Need for Retirement" is not easy to answer. The amount of money you need is largely dependent on:

-- How long you will live

-- What kind of quality of life and care you will require as you age

While other factors like inflation and your return on investments will impact you, your longevity and health costs are the biggest factors.

If the information you put into the calculator is correct, then our system estimates that you will need between \$500,000 to \$1m to maintain your quality of life in retirement (using the assumptions listed below). If you have \$150,000 in savings now, then you need to save about \$1,705.52 a month (at a 2.3 percent return on investment) to get to \$1 million dollars by age 67.

We wish you all the best!

http://www.NewRetirement.com

ASSUMPTIONS from NewRetirement Calculator:

General:

Pre-retirement income grows at 3% annually and then stops at your retirement age

Other/part time income starts at retirement

Home values increase at 3% annually

Income taxes are estimated to be 25% before retirement and 20% post retirement

Health Care inflation rate is assumed to be 6.3% (based on estimates made by the U.S. Department of Health and Human Services in October 2010 healthcare costs are expected to increase, on

average, by 6.3 percent annually until the year 2019)

If someone already has a reverse mortgage - their home equity is not included as part of their wealth

When you pay off a debt, you save half the extra money (if expenses permit) and spend the other half

Optimistic scenario:

Inflation = 0.5% per year (based on the market forecast for inflation arrived at by comparing the 10 year TIPS to the 10 year nominal Treasury)

Medical Costs are based on an average case in the BC CRR research

Assets grow in value at 4.5% annually (based on the current long term bond (30 year) rate of return, which has beaten stocks in recent decades)

Pessimistic scenario:

Inflation = 3% per year (historical average over the last 20-30 years)

Medical Costs are based on the highest 5% case in the BC CRR research

Assets grow in value at 1% annually (based on the current short term low return investment environment)