Many Americans do not do the calculations on retirement.
More than 75% of retirees do not calculate how much money they will need before making the leap, according to the Four Pillars of the New Pension 2020 study conducted by investment firm Edward Jones.
Fortunately, CNBC has lowered the numbers and we can tell you how much you need to save to get passive income of $ 50,000 each year when you retire.
First, a few basic rules. The numbers assume that you will retire at 50, have no money in your savings now, and intend to allocate a substantial amount of your income to reach your goal.
For investments, we assume an annual return of 4% when you save. We do not take into account inflation, taxes or any additional income you can get from social security and 401 (k).
At retirement, we use the “4% rule”, which is a general principle that says you can comfortably withdraw 4% of your portfolio each year.
It is important to note that with recent market volatility, there is a risk that the percentage of spending will decrease in the future.
Check out this video for a complete breakdown of numbers.
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Disclosure: NBCUniversal and Comcast Ventures are investors in acorns.