The retirement number you need for $10,000 a month

Deciding how much to save for retirement can be complicated. However, if you have an income goal in mind, you can work backward from there and make an informed choice about the amount of savings you need.

For example, if you're hoping to have $10,000 a month in retirement income, this is the amount you'd need to make that happen.

Your withdrawal rate and your account balance are the two determining factors affecting whether you can collect $10,000 per month in retirement income. You can't take too much from your retirement plans too soon, so you need enough invested that you can safely withdraw $10,000 per month.

There are many ways to determine a safe withdrawal rate. One simple option is to use the 4% rule to guide your withdrawals. This rule requires you to limit your withdrawals to 4% of your portfolio balance in the first year of retirement, while making annual inflation-based adjustments to your withdrawals in subsequent years.

If you decide to adopt this rule, generating $10,000 per month in retirement income would require you to have $3 million in any combination of your 401(k), IRA, Roth accounts, or other investment accounts that you can draw from…

Original source: https://www.usatoday.com/money/