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Everyone wants to know the “magic number” — the amount of cash they need to retire. Of course, if you save more cash and invest it in the right places, you should be able to retire earlier. But the real answer about when you can retire comfortably depends on many income and lifestyle factors, such as your cost of living, potential medical expenses, your time horizon, and the hobbies and activities you plan to pick up in retirement.
Fidelity Investments suggests that to retire at age 67, you need to have saved 10 times your annual salary if you want to live an “average” lifestyle. Fidelity defines an “average” lifestyle as one similar to how you lived during your working years. To get a sense of how much retirement costs changed over each of the past 65 years, GOBankingRates.com took the amount of the average annual wage for each year — based on data provided by the U.S. Social Security Administration — and multiplied by the Fidelity factor of 10 to come up with the average total cost to retire per year and maintain an “average” lifestyle.
Read More: 8 Things Not To Do in Retirement
Keep in mind the wage amount list here is the average for any given year. Of course, many workers earn substantially more — or less — than the averages. So, if your salary is higher than the average, you will need more money to retire than what you see in the list below if you hope to maintain the lifestyle you enjoyed while working. And by contrast, if you earned less than the average salary, you might not need as much money to maintain your lifestyle in retirement.
See how much you need to save today compared to workers in earlier generations who hoped to achieve their own retirement dreams.
1951
National average wage index: $2,799.16
Cost to retire: $27,991.60
1952
National average wage index: $2,973.32
Cost to retire: $29,733.20
1953
National average wage index: $3,139.44
Cost to retire: $31,394.40
1954
National average wage index: $3,155.64
Cost to retire: $31,556.40
Read More: 7 Times It’s OK To Dip Into Your Retirement Fund Early
1955
National average wage index: $3,301.44
Cost to retire: $33,014.40
1956
National average wage index: $3,532.36
Cost to retire: $35,323.60
1957
National average wage index: $3,641.72
Cost to retire: $36,417.20
1958
National average wage index: $3,673.80
Cost to retire: $36,738
1959
National average wage index: $3,855.80
Cost to retire: $38,558
1960
National average wage index: $4,007.12
Cost to retire: $40,071.20
1961
National average wage index: $4,086.76
Cost to retire: $40,867.60
1962
National average wage index: $4,291.40
Cost to retire: $42,914
1963
National average wage index: $4,396.64
Cost to retire: $43,966.40
1964
National average wage index: $4,576.32
Cost to retire: $45,763.20
1965
National average wage index: $4,658.72
Cost to retire: $46,587.20
1966
National average wage index: $4,938.36
Cost to retire: $49,383.60
1967
National average wage index: $5,213.44
Cost to retire: $52,134.40
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1968
National average wage index: $5,571.76
Cost to retire: $55,717.60
1969
National average wage index: $5,893.76
Cost to retire: $58,937.60
1970
National average wage index: $6,186.24
Cost to retire: $61,862.40
1971
National average wage index: $6,497.08
Cost to retire: $64,970.80
1972
National average wage index: $7,133.80
Cost to retire: $71,338
1973
National average wage index: $7,580.16
Cost to retire: $75,801.60
1974
National average wage index: $8,030.76
Cost to retire: $80,307.60
1975
National average wage index: $8,630.92
Cost to retire: $86,309.20
1976
National average wage index: $9,226.48
Cost to retire: $92,264.80
1977
National average wage index: $9,779.44
Cost to retire: $97,794.40
1978
National average wage index: $10,556.03
Cost to retire: $105,560.30
1979
National average wage index: $11,479.46
Cost to retire: $114,794.60
1980
National average wage index: $12,513.46
Cost to retire: $125,134.60
1981
National average wage index: $13,773.10
Cost to retire: $137,731
1982
National average wage index: $14,531.34
Cost to retire: $145,313.40
1983
National average wage index: $15,239.24
Cost to retire: $152,392.40
1984
National average wage index: $16,135.07
Cost to retire: $161,350.70
1985
National average wage index: $16,822.51
Cost to retire: $168,225.10
1986
National average wage index: $17,321.82
Cost to retire: $173,218.20
1987
National average wage index: $18,426.51
Cost to retire: $184,265.10
1988
National average wage index: $19,334.04
Cost to retire: $193,340.40
1989
National average wage index: $20,099.55
Cost to retire: $200,995.50
1990
National average wage index: $21,027.98
Cost to retire: $210,279.80
1991
National average wage index: $21,811.60
Cost to retire: $218,116
1992
National average wage index: $22,935.42
Cost to retire: $229,354.20
1993
National average wage index: $23,132.67
Cost to retire: $231,326.70
1994
National average wage index: $23,753.53
Cost to retire: $237,535.30
1995
National average wage index: $24,705.66
Cost to retire: $247,056.60
1996
National average wage index: $25,913.90
Cost to retire: $259,139
1997
National average wage index: $27,426
Cost to retire: $274,260
1998
National average wage index: $28,861.44
Cost to retire: $288,614.40
1999
National average wage index: $30,469.84
Cost to retire: $304,698.40
2000
National average wage index: $32,154.82
Cost to retire: $321,548.20
2001
National average wage index: $32,921.92
Cost to retire: $329,219.20
2002
National average wage index: $33,252.09
Cost to retire: $332,520.90
2003
National average wage index: $34,064.95
Cost to retire: $340,649.50
2004
National average wage index: $35,648.55
Cost to retire: $356,485.50
2005
National average wage index: $36,952.94
Cost to retire: $369,529.40
2006
National average wage index: $38,651.41
Cost to retire: $386.514.10
2007
National average wage index: $40,405.48
Cost to retire: $404,054.80
2008
National average wage index: $41,334.97
Cost to retire: $413,349.70
2009
National average wage index: $40,711.61
Cost to retire: $407,116.10
2010
National average wage index: $41,673.83
Cost to retire: $416,738.30
2011
National average wage index: $42,979.61
Cost to retire: $429,796.10
2012
National average wage index: $44,321.67
Cost to retire: $443,216.70
2013
National average wage index: $44,888.16
Cost to retire: $448,881.60
2014
National average wage index: $46,481.52
Cost to retire: $464,815.20
2015
National average wage index: $47,922.45
Cost to retire: $479,224.47
2016
National average wage index: $49,503.89
Cost to retire: $495,038.90
A Few Caveats: How to Properly Save for Retirement
Not all financial advisors recommend setting a fixed amount as your retirement savings goal. “Focusing on a number to reach makes creating a great retirement almost impossible,” said retirement specialist Roger Whitney, a certified financial planner based in Fort Worth, Texas. “The numbers just don’t work for most of us. We take a more multidimensional approach that focuses on creating a life you don’t want to retire from.”
There are also other approaches to calculating your retirement costs. If you follow the classic rule, you can withdraw 4 percent of your total savings each year, adjusted for inflation. Take that approach, and you should have enough to fund your expenses for 30 years without running out of cash.
But that is not an absolute rule, and it depends how much is in your nest egg. If you have not saved enough, 4 percent is not going to be enough to sustain you without additional income.
Other cultural changes since 1951 also impact retirement costs. “Baby boomers will live longer, be more active and more engaged in retirement than any other generation in the history of the world,” Whitney said. “The same approach that worked for our parents won’t work for us.”
This article originally appeared on GoBankingRates.
