The average American who lives to the ripe old age of 100 will spend $3.5 million in his or her lifetime, according to an analysis of data from the Bureau of Labor Statistics. A good chunk of that bill, more than $1.5 million, will have been racked by your 50th birthday. The next 30 or so years -- the average 50-year-old today can expect to live until 81 -- will run another $1.4 million. And the lucky few who make it to 100 will need an additional $630,000. Experts say these high costs of living often come as a shock to retirees, many of whom expect to dramatically cut back on their living expenses as they get older and stick to a fixed budget. "A lot of time people actually end up spending more money in retirement than they may have spent when they were working," says Heidi Schmidt, a wealth manager in Dallas with USAA.So $1.5million at age 50, 1.4 million for the next 30 years, and another $630k for next 20 years if you are so lucky as to live to 100.
We're currently spending on average $4000 a month which means $48k/year. If we continue living at this rate, we will spend $720k for the next 15 years until we are 50.
How much should we save for retirement? We will probably not have a house cost ($1500/month savings), our food bill should be lower ($100-200/month lower), and our utilities should be lower ($100/month). So just with those savings, our current $4000 expense could be nearly halved. Around $2k/month or $24k/year. If we live out a modest lifestyle for the remainder of our lives and hopefully relatively little medical expenses cuz we are taking care of ourselves, the next 30 years would cost about another $720k.
So if I have a minimum retirement amount it would be around $720k, although I'm hoping to have enough investments set up that I won't have to worry about retirement. In any case, if it does run out sooner, I have family to fall back on. God will provide, even in retirement.
How much are you saving for retirement? What is your goal?