Calculating how much you'll need when you retire

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If you worry a lot about retirement, and if you'll have enough money to cover your cost of living in 2015 or 2036 or whenever you expect to be starting your golden years, have I got a web site for you.

Try an easy-to-use retirement calculator. It determines how much money you need to put away every year if you hope to retire at age 65 with 80% of your pre-retirement income.
  • You type in your current age.
  • Then in another box, you put in your current salary.
  • Finally, you plug in the numbers as to how much you've already saved.
  • Click "submit" and after several seconds of waiting, you have your numbers.
What's especially eye-opening is that the older you get, and the lower your savings, the more money you have to save. Sure, you're thinking: Duh. But I'm just saying that to actually have those specific numbers in front of you -- it's educational.For instance, I pretended for a moment that I'm 25 years old, with a $40,000 a year job and zero savings. I'd have to save 8% of my salary every year. (The calculator allows for inflation and assumes that your salary will rise with it.)

Then I put the numbers in, pretending that I'm 45, with a $40,000 a year job and zero savings. And suddenly I'd have to save 18% of my yearly income. And the more you make a year, and the older you get, of course, the larger portion of your income you have to put aside (I had a lot of fun, putting in all sorts of numbers. If I was 55, making $100,000 a year with $20,000 in savings, I'd have to put away 39% of my income every year.)

Of course, one reason I kept plugging in imaginary numbers is that my own real numbers leave a little something to be desired. So I'm going to definitely start putting away more than I have been. If I keep going the way I'm going, I'll be retiring when I'm 97.

Geoff Williams is a business journalist and the author of C.C. Pyle's Amazing Foot Race: The True Story of the 1928 Coast-to-Coast Run Across America (Rodale).
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