Saving & Spending

How much should you save to retire with $2 million? Here’s a guide

Today’s workers have a challenging task ahead of them in saving for retirement.

It’s a rare employer that still offers a pension, and Social Security benefits are only designed to replace around 40% of your pre-retirement income. That means the majority of your income in retirement will need to come from your savings.

Retirement isn’t cheap, though, and the average worker estimates retirement will cost around $1.7 million, a survey from Charles Schwab found.

That might sound like a crazy high number, but it may be fairly accurate depending on your situation.

If you spend $60,000 per year and live for 25 years in retirement, that’s $1.5 million right there – not even accounting for inflation. And with healthcare and long-term care costs skyrocketing, you could spend tens or even hundreds of thousands of dollars on those costs alone.

With that in mind, say you wanted to build an especially sturdy nest egg worth $2 million. How much would you need to save right now to reach that goal?

It may be tough to stash away more than $500 per month at age 20, but it’s downright impossible for the average person to save over $19,000 each month if they wait until their 60s to start saving for retirement. So even if you feel like you don’t have much to save now, keep in mind that the longer you wait to start, the more challenging it will become to reach your goals.

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The Motley Fool is a USA TODAY content partner offering financial news, analysis and commentary designed to help people take control of their financial lives. Its content is produced independently of USA TODAY.

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