HOW MUCH DO YOU NEED TO RETIRE?

HOW MUCH DO YOU NEED TO RETIRE?

There are two ways to compute how much money you will need to retire. The first way is complex and time-consuming: Visit one of the many online retirement calculators and enter such data as your age, current income, how much you have saved for retirement so far, your current monthly savings, a projection of your retirement expenses and a definition of your tolerance for investment risk. The second way is simple and fast: Take your current income and multiply it times 10. That's how much you need to save in order to retire and continue to live the way you do now. That's the word from Lincoln Financial Group, which has bucked the trend to figure out an easy math solution to the very hard question plaguing anyone close to picking up that gold watch: How much money do I need to live a life of leisure? Lincoln Financial says it's pretty simple: We need 10 times our current annual income for retirement: 10 x income = goal. And while the exact dollar amount of your retirement goal will change depending on what you're making throughout your career, the 10-times benchmark still applies. Let's run some numbers as an example:

• Your salary is $75,000.
• You earn $3,000 a year in interest, dividends and other investments.
• The total is $78,000.
• Retirement calculation is $78,000 x 10 = $780,000.

How did Lincoln Financial come up with this magic "10-times" calculation? It surveyed 1,200 current retirees of varying income, none of whom relied on receiving an inheritance, selling their home or business or redeeming shares of their former employer's stock. while saving $500,000 to $1 million may seem impossible, it's really quite doable if you regularly contribute to a 401(k) or IRA and resist using the funds as your personal piggy bank until you do retire.