What does this budget mean for you?
Added up, the average retiree in this model spends about $3,700 per month, or $44,600 per year. If you retire at age 62, you will need a little over $1 million in savings to finance the “average” lifestyle.
Don’t get down, however. A couple on Social Security is already getting up to $32,000 before taxes. So your private investments need not be in the millionaire range to close the gap.
And, you could always just spend less.
The reality is that you need to save and budget strictly now to be comfortable down the road.
Put differently, you shouldn’t wait for the first gray hair to start saving and investing. Adjust your own numbers to see how small changes can lead to big impacts in the future.