Money is a very personal asset. It goes beyond the fact that you are responsible for whatever you choose as important to spend your money on, It’s also about what you hope to achieve with money, the things that are necessary to have at certain points in your life, and your lifestyle. Knowing how much money you need to retire, depends on all those things.

Market Watch | Experts agree that you should have about 70 to 80% of the final salary you earn before retirement, as your retirement annual income

Now traditionally, experts agree that you should have about 70 to 80% of the final salary you earn before retirement, as your retirement annual income. They predict that this is what you need to live a comfortable life, but the reality is that people are very different and those figures are not set in stone. What constitutes a comfortable life is personal and depends on what your needs are or what you believe they are going to be at that retirement stage.

There’s really no need to continue working longer than necessary trying to meet up with 80% of your net salary just so you can retire. You may not need up to that if it doesn’t correspond with your lifestyle, and if you happen to be comfortable with less, then it only gives you an earlier retirement date.

There are many things to consider when it comes to living comfortably after retirement. At the stage you retire there are health concerns that may or may not arise which you would want to prepare for in any case. You may also want to use your retirement days to travel the world like you’ve always wanted and if those things are factored in then your expenses may increase and you’ll need to save more money for retirement.

The Balance | If someone spends more than they earn, then there’s no way for a comfortable retirement no matter the percentage of the annual income that is being saved

But if you’ll need to consider all these expenses, it may not be wise to decide your retirement needs based on income. If someone spends more than they earn, then there’s no way for a comfortable retirement no matter the percentage of the annual income that is being saved. On the other hand, if someone can save a little up to half of their income and is comfortable with spending just about half as well, then there will be no need to save as much as 80% of their annual income.

Doing so only subjects you to working overtime when you could comfortably retire early, and have your life and time to yourself. Also, saving more money than you need for retirement only puts you in a position of having too much saved instead of using the money to enjoy things that would only be available for you to truly enjoy in your youth.

Statistically, a good percentage of people spend relatively the same amounts in retirement that they do while still working. Some expenses reduce and some increase but on average, only about 38% spend more in retirement and the remainder spend either the same or less.

New Jersey Education Association | Statistically, a good percentage of people spend relatively the same amounts in retirement that they do while still working

In reality, it makes better sense to plan the amount you’ll need for retirement based on your spending and not your income since after all, it is the spending that says a lot more about your lifestyle than the income does.