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If youre wondering how much retirement income you need, youre not alone. Depending on when Bob retires, he needs $30,000 to $40,000 annually from his savings to maintain his current lifestyle. This means its more than possible to live off $60k a year. Marguerita M. Cheng, CFP, CRPC, RICP |, Selling My Structured Settlement Payments, Survey of Consumer Finances (SCF) by the Federal Reserve, not have enough money to support your lifestyle, https://www.census.gov/data/tables/time-series/demo/income-poverty/cps-hinc/hinc-02.2021.html#par_textimage_10, https://www.pensionrights.org/resource/income-from-pensions/, https://www.pensionrights.org/resource/sources-of-income-for-older-adults/, https://www.ssa.gov/news/press/factsheets/colafacts2022.pdf, https://www.schroders.com/en/us/defined-contribution/dc/retirement-readiness-2022/, https://www.federalreserve.gov/econres/scf/dataviz/scf/table/#series:Retirement_Accounts;demographic:agecl;population:1,2,3,4,5,6;units:median, https://www.dol.gov/sites/dolgov/files/ebsa/researchers/statistics/retirement-bulletins/private-pension-plan-bulletin-historical-tables-and-graphs.pdf, https://www.cnbc.com/2021/06/14/a-third-of-americans-plan-to-retire-later-due-to-covid-19-study-finds.html, https://www.aarp.org/retirement/planning-for-retirement/info-2020/how-much-money-do-you-need-to-retire.html, https://www.nirsonline.org/reports/examining-the-nest-egg/, https://www.transamericacenter.org/docs/default-source/retirement-survey-of-workers/tcrs2019_sr_19th-annual_worker_compendium.pdf, Common Retirement Mistakes and How To Avoid Them. But from studying history, we can get a reasonable sense of what it will take. Since we live in a fairly high cost-of-living city, so this number is well within range of the $75,000 Princeton's scientists came up with when looking at the whole country. Money needed to retire. Unfortunately, theres not a one-size-fits-all answer. The food costs in a budget for family of 4 ranges from $128.90/week on the low end, up to $295.30/week. You'll want 20% of your monthly income to go towards financial investments. As you gain work experience and move onto a career track, you can amp up your contributions to your emergency fund and to your retirement account as well. Can I retire with 600,000? 2023 GOBankingRates. That said, it might take you a while to save up for a down payment. Also, look for ways to increase your income. Get personal finance tips, expert advice and trending money topics in our free weekly newsletter. News provided by The Associated Press. That way, you can figure out how much you should spend on housing, food, gas, and other recurring expenses. Most retirees want to maintain their standard of living during retirement. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. That's only an option, though, if your health allows you to keep working. Therefore, you'll pay 6.2% of your salary, or $3,720. The matrix below is a little intimidating, so let's walk through it with an example. Methodology: GOBankingRates analyzed the following expenditures of Americans aged 65 and older, based on data sourced from the Bureau of Labor Statistics (BLS) most recent Consumer Expenditure Survey release for the full year of 2021: (1) annual spending on groceries, defined as food at home; (2) annual spending on housing, defined as shelter; (3) annual spending on transportation, defined asgasoline, other fuels, and motor oil AND other vehicle expenses; (4) annual spending on healthcare; (5) annual spending on utilities, defined as utilities, fuels, and public services; and (6) overall average annual expenditures.