Check out our 3-step approach to help you calculate – and save for – what you’ll need for retirement.

The meaning of retirement has changed over the years. Today, we're living longer and staying active long after hitting the age of retirement. There's not necessarily a clear-cut picture of what retirement looks like, and that can change the way we calculate our financial needs after retirement.

Even though retirement and its needs have changed, one question has remained consistent. Most people approaching retirement want to know "How much money do I need to retire?"

Determining how much money you need for retirement depends on what your vision of retirement looks like. When you know what you want your life to be like after you've retired, you can better plan for it and gauge how much money you'll need as part of that plan.

Here's a simple three-step plan to help you determine how much you need to save for retirement and the actions you can take to turn your retirement dreams into reality.

Step 1: Start with your goal1

Looking at your end goal allows you to draw the financial map that can help you reach your destination. Some of the important questions to ask yourself in this step include:

  • Where do I want to live?
  • Do I want to travel? If so, what places do I want to visit?
  • What hobbies will I want to continue or pursue?

Think about how you want your lifestyle to look. Write down every goal you can think of, and then you’re ready for the next step.

Step 2: Ask how much you need to save

With this step, you want to look at the goal you have for your retirement and start calculating how much you'll need to save now to enjoy your life later. Accurately counting the cost can be a challenge, so use planning tools to help.

Nationwide offers the free My Interactive Retirement Planner to help set your goal and track your progress. In less than 10 minutes, you can get an idea of how well you're progressing toward your goal, and you'll also get recommendations on how you can increase contributions to improve your preparation.

Another guideline to keep in mind is your replacement ratio. This is a percentage of your pre-retirement income that represents what you'll live on during retirement. Generally, you can plan to need—and start saving for—70–80% of your annual salary each year in retirement.2

Step 3: Practice step-up savings

While fixed contributions to your retirement fund let you make steady progress and build savings, a strategy called step-up savings can also help make significant gains without making a big impact in your current lifestyle.

Let's say you're saving $100 per paycheck. Adding an additional $25 per paycheck, or just $50 per month, can add up significantly over time. If it's difficult for you to deposit that extra money every month, have it deposited directly into your investment account so you won't miss it or be tempted to spend it.

Planning your retirement today gives you the chance to put aside the money to be able to live the life you're envisioning even after you've quit working. Using tracking and planning tools can help you calculate what you need and create strategies for reaching your goals.

When you're ready to plan for your retirement, Nationwide can help you find the strategy that works best not only for the future, but for the way you live today3. Learn more about retirement solutions that can help make your plan a reality.
chat icon
Want to work with a financial professional?
3. “How much is enough? A secret strategy for retirement saving,” Nationwide,, downloaded Dec. 8, 2018.