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Question for the Money Doctors

Question submitted on May 5, 2014.

Question

I'm 53 yrs old and have about 45k in my 401(k). how much do i need to contribute going forward in order to retire comfortably

Answer

Not knowing your complete financial picture, we can offer you a bit of general guidance.  The amount you should contribute should be at least equal to the amount your employer will match and then as high as possible within the context of your personal financial plan.  Sooner rather than later, you should project your annual retirement income (including Social Security) net of living expenses.  Using the 4% retirement withdrawal rule of thumb, divide the calculated annual net income by 4% to estimate the retirement assets needed.  A CPA/PFS will help you fine tune the calculation for the number of years you have to save and build in an annual rate of return.  Visit www.findacpapfp.org to find one in your area.


For additional information visit http://www.360financialliteracy.org/