How much retirement savings do you need? To a large extent, the answer depends on three key factors: where you plan to live and the cost of living there; how many years you’ll live in retirement; and, how much your health care expenses will be during your retirement years.
That’s a great point. The average life expectancy for U.S. women is roughly 81 years old, and for men around 76¹; but you may live a lot longer. And retirement years are when most people have their highest health care costs.
How much money you’ll want to have for retirement depends on the lifestyle you’d like to enjoy.
The question is: how much will I need? Look at your needs and wants and decide which expenses are essential and which ones are discretionary. To learn more, see the topic Smart Spending.
Essential vs. discretionary expenses
Mortgage or rent
¹ Statistica. Average life expectancy* in North America for those born in 2017, by gender and region (in years)