In order to maintain your current standard of living after retirement, financial advisors frequently advise replacing around 80% of your pre-retirement income.
Accordingly, if your yearly income is $100,000, your retirement income goal should be at least $80,000 (in today's money).
Your retirement "number" isn't determined by choosing a certain amount of savings, which is a crucial distinction to make.
For instance, a $1 million nest egg is the most popular retirement objective among Americans. But this is flawed reasoning.
Whether you will have enough money to generate the income you need to sustain your preferred standard of life after retirement is the most crucial consideration in deciding how much you need to retire.
Because you can often cut back on some spending when you retire, you don't need to replace 100% of your pre-retirement income.
Aim for 90% to 100% of your pre-retirement income if you intend to travel frequently in retirement.
On the other hand, you might be able to live comfortably on less than 80% if you have plans to pay off your mortgage before you retire or minimise your living space.