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Setting a Retirement Savings Goal

It’s difficult to reach a destination unless you know where you’re heading. Yet only 42% of workers or their spouses have tried to estimate the savings they would need to live comfortably in retirement.1

To get started on establishing a retirement savings goal, use the simple worksheet on this page to compare the income you think you will need (or want) with the sources of income you expect.

How Much Income Will You Need?

Everyone’s situation is different, but one common guideline is that you will need at least 70% to 80% of your pre-retirement income to meet your retirement expenses. This assumes that your mortgage is paid off, you have lower transportation and clothing expenses when you stop working, and you will no longer be contributing to an employer-sponsored retirement savings plan.

Although some expenses may be lower, others might increase, depending on your retirement lifestyle. Perhaps you want to travel more or engage in new activities.

Don’t forget to budget for medical expenses. A recent study suggests that an average 65-year-old couple who retired in 2019 might need $301,000 in savings to cover Medicare premiums and out-of-pocket health-care expenses (not including long-term care).2 This equates to about $12,000 annually over a 25-year retirement. Future retirees might face even higher expenses.

IMAGE of couple on the beach and a table for generating your desired retirement income.

Estimate Income Sources

You can estimate your monthly Social Security benefit at different retirement ages by using the tool at ssa.gov/retire/estimator.html. The closer you are to retirement, the more accurate this estimate will be. If retirement is many years away, your benefit could be affected by changes to the Social Security system, but it might also rise as your salary increases and the Social Security Administration makes cost-of-living adjustments.

If you expect a pension from current or previous employment, you should be able to obtain an estimate from the employer.

Add other sources of income, such as from consulting or a part-time job, if some type of work is in your plans. Be realistic. Consulting can be lucrative, but part-time work often pays low wages, and working in retirement is less likely than you might expect. In 2019, 80% of workers indicated that they expect to work for pay after retirement, but only 28% of retirees said they had actually done so.3

The income from your savings may depend on unpredictable market returns and the length of time you need your savings to last. Higher returns would enable your nest egg to grow faster, but it would be more prudent to use a modest rate of return in your calculations.

Remember that all investing involves risk, including the possible loss of principal, and there is no guarantee that any investment strategy will be successful.

Moving Forward

A rough estimate of your retirement savings goal is a good beginning, and a professional assessment may be the next step. Although there is no assurance that working with a financial professional will improve investment results, a professional can evaluate your objectives and available resources and help you consider appropriate long-term financial strategies.

 

Information provided has been prepared from Broadridge Advisor Solutions sources and data we believe to be accurate, but we make no representation as to its accuracy or completeness. Data and information is provided for informational purposes only, and is not intended for solicitation or trading purposes. Broadridge Advisor Solutions is not an affiliate of AXA Advisors, LLC. Please consult your tax and legal advisors regarding your individual situation. Neither AXA Advisors nor any of the data provided by AXA Advisors or its content providers, such as Broadridge Advisor Solutions, shall be liable for any errors or delays in the content, or for the actions taken in reliance therein. By accessing the AXA Advisors website, a user agrees to abide by the terms and conditions of the site including not redistributing the information found therein.

Securities offered through AXA Advisors, LLC (NY, NY 212-314-4600), member FINRA, SIPC. Annuity and insurance products offered through AXA Network, LLC and its subsidiaries.

Equitable Advisors is the brand name of AXA Advisors, LLC (Member FINRA, SIPC)

California Insurance License #: 4002797

Esteban Chan has earned the Retirement Planning Specialist (RPS) title. The Retirement Planning Specialist title is awarded by Equitable Advisors, based upon the Financial Professional's (FP) receipt of a Certificate in Retirement Planning from the Wharton School, University of Pennsylvania. In a collaboration between the Wharton School and Equitable Advisors' affiliated life insurance carrier, coursework for the certificate was developed exclusively for Equitable Advisors FPs, and the title may be used only by FPs who have completed the required coursework and maintain the title through ongoing continuing education requirements. To verify that an FP has earned and holds the title in good standing, contact us at atretirement@equitable.com. Complaints about an Equitable Advisors FP should be directed to customer.relations@equitable.com. Equitable Advisors is the brand name of AXA Advisors, LLC.

Securities offered through AXA Advisors, LLC (212-314-4600), member FINRA/SIPC. Investment advisory products and services offered through AXA Advisors, LLC, an investment advisor registered with the SEC. Annuity and insurance products offered through AXA Network, LLC and its insurance agency subsidiaries. AXA Network, LLC does business in California as AXA Network Insurance Agency of California, LLC and, in Utah, AXA Network Insurance Agency of Utah, LLC. AXA Advisors and its affiliates do not provide tax or legal advice. Individuals may transact business and/or respond to inquiries only in state(s) in which they are properly registered and/or licensed. The information in this web site is not investment or securities advice and does not constitute an offer.

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