Finding a Realistic Retirement Figure for Gen X, Millennials
any financial advisers recommend saving at least $1 million since life spans are increasing, but even half of that amount appears to be daunting and unattainable for many people who are saddled with both student loans and credit card debt.
While there are various rules of thumb for people to determine a number of how much money they will need, there is no magic number for retirement savings, said Jamie Hopkins, a retirement professor at the American College of Financial Services in Bryn Mawr, Pennsylvania. People often need 10 to 25 times their pre-retirement income to "maintain the same quality of life in retirement," he said.
View all Courses One of the first things Gen-Xers and Millennials should calculate is how much they plan to spend each year once they quit working.
Evaluate your current assets and if you plan to include income from Social Security. If you plan to move to a smaller town or a state without income tax when you retire, your expenses will be lower.
Two of the largest assets that Americans can factor into the equation are the equity of their home and the amount of Social Security they will receive. While home equity cannot always be used to generate retirement income, some retirees wind up downsizing to a smaller home or strategically using a reverse mortgage, Hopkins said.
