The “Rule of 25” says you should multiply your total annual expenses by 25 to determine how much you’ll need to have saved by the time you retire. So if you plan to spend $50,000 per year in retirement, you’ll need to save $1.25 million. To have $100,000 per year to spend, you’ll need $2.5 million.
The Rule of 25 is a good starting point, but it is not an ironclad, one-size-fits-all solution for everyone. Among the uncertainties are health care and long-term care costs and inflation.
There are numerous other posts on this blog to provide guidance on how much to save.
For those who gasp and shake their heads at million dollar goals, a book that provides a contrary perspective is “Get a Life: You don’t need a million to retire well” by Ralph Warner.
Source: Financial Planning for Women