Well, it is always important to be self-dependent in your old age during retirement. Have you ever thought- how much money would you require to retire in comfort and without much hassle further in life?
In order to be happy and content post-retirement, financial services companies commend putting away 15 percent of your income per year starting at age 25 and investing more than 50 percent of your savings over your lifetime.
If you are looking headlong to an active retirement -- traveling, completing your bucket list, or in general doing all of the things you have been tapping off while you have been busy working -- you will need to adjust your savings target higher.
The formula to know 'how much money you need to retire in comfort' is simple. “It’s just your income, less your expenditure, divided by your income. Multiply by 100,”.
They break it down into four steps:
-Calculate your income for a specific period
-Calculate your spending for the same period
-Subtract your spending from your income to figure how much you’re saving, then divide this number by your income
-Multiply by 100
When estimating your saving rate, it’s significant to note that it should include your revenue after taxes, because you’ll over-estimate your savings otherwise. Besides, it’s stress-free to look at everything from an after-tax basis right now, since your future proposed self will face the uncertainty of different tax rates.
So, try the above suggested method to know your situation during retirement.