Couple looking at an investment portfolio.

Will you have enough saved by retirement age?

You know you need to save, but how much? Estimate your future retirement income.

Have you been saving for retirement without a clear idea of how much money you'll need to live on? If so, estimating your retirement income needs should be your next step.

The 2018 Retirement Confidence Survey by the Employee Benefit Research Institute found that 24% of workers are not at all confident they will have enough money for a comfortable retirement. That's a lot of people facing an uncertain stage at the end of their lives. If you don't want to be among them, take action now.

Plan to maintain your standard of living

Most retirees want to maintain their standard of living during retirement. To accomplish this, financial experts say you'll need between 70-80% of your pre-retirement income. So, for example, a couple earning $60,000 per year would need between $42,000 ($60,000 x .70) and $48,000 ($60,000 x .80) each year during retirement.

Why less? Retirement typically triggers a number of changes in spending patterns. Your cost of living will change if you've paid off your mortgage and other loans, your children have finished college and moved away, or you no longer have working- and business-related expenses. Plus, you'll no longer be contributing to retirement plans.

Of course, your specific situation will dictate the amount of money you'll need to live on. You may need more money than you anticipate. Health-care costs have increased, and you could possibly use up a greater portion of your income than you planned to ensure your insurance needs are met. Also, you'll have more time to do the things you love, so you may spend significantly more on leisure activities, such as travel, entertainment and hobbies.

Consider your lifespan

In addition, you need to take into consideration how long you might live. People are generally in better health and living longer, more active lives than ever before. According to the Social Security Administration, a man reaching age 65 today can expect to live to 84; a woman, 87. Those are only averages — one in 10 people will live past age 95.

With so many factors to consider, estimating retirement needs can be difficult. Our retirement calculator is a good place to start. To see if you're on track, answer a few questions about your goals, how much you're saving now, and your retirement income sources.

Neither State Farm nor its agents provide tax or legal advice.

The information in this article was obtained from various sources not associated with State Farm® (including State Farm Mutual Automobile Insurance Company and its subsidiaries and affiliates). While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. State Farm is not responsible for, and does not endorse or approve, either implicitly or explicitly, the content of any third party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. State Farm makes no guarantees of results from use of this information.

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