Americans believe that you need to save $ 1,9 million to retire: how much money should you really put aside

Many people think that $1 million in savings is the minimum amount for retirement. But most people believe that for this you need to have $ 1,9 million. How much do you really need to accumulate in a retirement account in order to retire with peace of mind, the publication said. CNBC.

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The fact is that the COVID-19 pandemic has given people the opportunity to re-create the way they want to live. And for most people, their dreams have changed.

Define your desires

When each of us thinks about how much savings he will need, there is no single right answer for everyone. Especially given the current realities and COVID-19.

You should decide how you want to see your life in retirement. Be very specific in your desires. Decide what you plan to do, what you will afford and for how much, how much you will travel, what to do.

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When you decide on your desires, you can draw up a detailed action plan to fulfill them.

Consider options

There are 5 key factors to consider before you start calculating how much you need to save for retirement.

The first of these is inflation, as the cost of living index rises every year.

Therefore, you need to calculate the cost of living - this is the second important factor. To do this, study the place where you plan to go after retirement. Compare how much it costs to live in different cities or even states.

The third is healthcare spending. This is a very important factor to keep in mind. Find out if you can keep the same insurance plan you have now, or consider other options available.

Social insurance is the fourth important factor. The main thing here is to take into account the time when you decide to go on a well-deserved rest. The average American hopes to retire by age 62. But the later you start getting benefits, the bigger the payments will be. Explore all available options and think about when it is more profitable for you to go on a well-deserved vacation.

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The fifth factor is the lifestyle. Think about what you want to do and how you plan to pursue this hobby.

It is by putting all these factors together that you can make the most optimal decision about how much money you need and how your pension will be.

Set a goal

Retirement is not an age, but a financial indicator. The problem is that people tend to spend more when they have a lot of free time.

Friday and Saturday are the days when Americans spend the most money. But when you are retired, every day becomes Friday or Saturday for you. So be vigilant and control your spending.

Create a spending plan

How much of your savings do you spend each year? For some it is 8%, for others it is 4%.

The main thing in this situation is to understand how much money you have accumulated and how long it will last with your planned spending. After all, you would not like to spend all your savings ahead of time?

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