There are also other potential considerations. Many workers have to retire earlier than planned. For example, approximately 3 million workers retired earlier than anticipated in 2020 due to the COVID-19 pandemic.
Older workers often have to retire early due to layoffs, health problems, or caregiving duties. Saving for a longer retirement than anticipated gives you a safety cushion.
It's also important to consider the impact of inflation on your retirement plans. Inflation has garnered significant attention in recent years, as it has only been a few years since we experienced the highest inflation in a generation.
Even when costs rise at a typical rate, inflation often hits senior households harder than working-age households. That's because seniors spend a higher portion of their income on expenses such as healthcare and housing, which tend to increase faster than the overall inflation rate.
While we're trying to present the broad strokes here, it's still a good idea to consult a financial advisor who can tailor a retirement savings goal to your particular situation and help set you on the right path with a savings and investment plan that ensures you reach your goals.
By using the methods discussed in this article, you can get a good idea of how much you'll need to save to retire comfortably. Keep in mind that this isn't designed to be a perfect method, but rather a starting point to help you assess where you are and any adjustments you might need to make to get where you need to be.