"How much money do I need to retire?" This is a common question that I'm often asked during the early stages of retirement planning. The answer, however, is never that simple. Instead of focusing on big number full of commas, I prefer to answer the question with a question: " how much income will you need on an annual basis?"

As opposed to starting with a big, round, number, analyzing several aspects of your future financial picture can provide a stronger, more detailed road map to your retirement. Social Security benefits are a great place to start. Did you know that you can estimate your benefit online, in less than five minutes? Having an idea of what kind of monthly income you'll receive from Uncle Sam is a good place to start. Consider any pensions that may be available to you, large, or small. Even a willingness to work part-time for a few years can have a substantial impact on your future income needs. By answering these questions first (as well as a few others), you're able to develop a plan to save today, with tomorrow's goals in mind.

Consider Bob and Sue who want to enjoy a pre-tax retirement income of $65,000 a year. If working just from investment assets, they'd need approximately $1.7 million to create this income stream. Add Bob's Social Security ($24,000 annually) and Sue's ($13,000), and all of a sudden, their retirement assets have to generate $28,000 on an annual basis. At this level, their needs can be met with an asset base of approximately $750,000. If Bob or Sue wanted to work part-time for a few years, the picture only brightens.

The point here is that there is no one-size-fits-all answer to the question, "how much do I need to have saved to retire comfortably?" The answer that's right for you depends on a wide range of variables, and isn't answered simply with a large, round, number. To learn more about how to begin the process of defining your financial future, don't hesitate to ask.

Chuck Wade, Financial Advisor



(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).