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How Much Retirement Savings Do You Really Need?

December 13, 2019
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You know that you’ll need personal savings to help supplement your retirement income. Most people have the same question: How much do I really need to save? There isn’t one answer that applies to everyone unfortunately! Your specific needs depend on your situation – will you have a pension, how much will you receive in Social Security, and the financial needs of your lifestyle. Most financial professionals can agree that your lifestyle plays a major role in dictating what you’ll be looking to fund during your retirement. Here's a standard benchmark based on age that can be use for a basis. 

  • Age 35 (1x Annual Salary)
  • Age 45 (3x Annual Salary)
  • Age 44 (6x Annual Salary)
  • Age 65+ (8x Annual Salary)


Thinking about actual numbers often leaves people feeling a little panicked. It’s not too late to start or to adjust your course! Here are some things that can help you think through how much you will need to save:

Know Your Pension

Pension benefits vary widely between each school district employee because of different times paying into the pension system, age, and years of service.

Take A Stand On Your Future

State pension troubles seem to always be on the news. Social Security’s under funding has been widely publicized in recent years. The point is not to panic but to take a stand on what you believe will happen to your state pension and to Social Security. Get informed and talk with a financial professional about your pension and Social Security.

Picture Yourself In Retirement 

How much you need depends significantly upon what you want to do, where you want to go, and the kind of lifestyle you want to lead. Perhaps the most important question is, “How does my picture of the future compare to my paycheck today?” Try living off your estimated retirement pension benefit for a few months! If you find that it's definitely not enough, that's when you might want to look into other savings vehicles. 

Pay Yourself First

A little sacrifice now can reap big benefits in the future. If you are not able to take a pay cut in retirement, then consider putting away a little extra now in order to supplement your pension. Investing a small amount every paycheck over a number of years may help fill the gap.