Many Americans don’t count on their retirement.
According to the 2020 Four Pillars of the New Retirement study by investment firm Edward Jones, more than 75% of people planning to retire have not calculated how much money they will need before taking the plunge.
Fortunately, CNBC has cracked the numbers, and we can tell you how much you need to save to get $ 50,000 in passive income each year in retirement.
First of all, some basic rules. The numbers assume that you will retire at age 50, are out of savings, and plan to put a significant portion of your income aside to achieve your goal.
When investing, we assume an annual return of 4% when you save. We do not consider inflation, taxes, or any other income you may receive from Social Security and your 401 (k).
When we retire, we use the “4% rule,” a general principle that says you can comfortably withdraw 4% of your portfolio each year.
It is important to note that with the recent market volatility, there is a risk that you will have to lower your spending rate in the future.
Watch this video for a full breakdown of the numbers.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns