As John Campbell, certif ied f inancial planner and CEO of Chartered Wealth Solutions, points out, there’s nothing mysterious about saving for retirement. If you can determine when you started saving for retirement, when you’re hoping to retire and how much money you’ll need once you’ve retired, you can work out exactly how much to save each month for a comfortable retirement.
Hopefully you can answer question one and two, but answering the third question might be a little more complicated. “In determining how much you will live off each month, your current monthly budget is a good place to start. You can see what your expenses are for each month and remove the ones that you won’t have in retirement, such as bond payments and children’s education. Most aim for 70% of their final salary as an income in retirement. This gives you some idea as you set a goal of how much you would like to retire on,” he advises.
This calculation should get you to how much you’ll need when you retire, but it still doesn’t answer how much you should be saving right now. Michele Ongley, head of institutional business development at 10X Investments, says increases in annual income, additional income like bonuses, your career and whether you are married or not or the number of children you have all affect how much you can realistically